The budget program that could be the biggest disaster since pink batts

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THE government’s new plan for youth unemployment is a beautiful idea. Helping vulnerable young people get jobs is one of the most important social and economic outcomes imaginable.

But this tremendously admirable program could quite quickly find itself in the express handbasket to hell.

This new program is named PaTH and the Treasurer is calling it real work for the dole. Its real because instead of doing mindless tasks for a government agency or council, the young people will work for a real life business.

The business gets $1000 to take on the young person, and the young person gets $200 extra a fortnight in their Centrelink payment. They are supposed to work 10-25 hours a week, so that rate of pay is a pretty lean $4 to $10 an hour.

A cynical person might say that it is giving Aussie business labour at Chinese wage levels. But on the other hand it is probably more practical than work for the dole. Its only 4 to 12 weeks and they could learn valuable skills.

Or they could lose an arm.

What could possibly go wrong when you send 30,000 young vulnerable people into businesses? It surely wont be long until a youth falls off a ladder or puts their hand in a meat slicer, and suddenly this program is going to remind everyone of the pink batts program.

That, if you remember, was also a lovely idea, subsidising people to get insulation in their roofs. It ended after there were four deaths in the space of five months. The similarities are notable. Both are subsidy programs intended to fix economic and social problems in one fell swoop.

And both could attract the wrong sort of fly-by-nighters.

Even if the vulnerable youth of Australia come through this PaTH program unscathed, it is unclear if theyll learn anything. With $1000 on offer from government, might not a ruthless business owner take them on and say Sit in the corner, play Clash of Clans on your phone if you want, but dont interrupt me?

The government made a huge song and dance out of this youth unemployment program. It was one of the first things the Treasurer mentioned in his Budget speech on Tuesday night. But the amount of new money they are providing is $80 million a year, (in Budget terms thats not much) and they are also saving $100 million a year by dramatically reducing Work for the Dole.

The Treasurer kept repeating the phrase that it is not just another training program. OK. What it is, though, is one of very few things the government is doing on social policy which may be way he wants us to notice it.

Any way you look at it, this program is not such a big deal as the government makes out. And they could swiftly regret drawing so much attention to it if it all turns bad.

Jason Murphy is an economist. He publishes the blog Thomas The Think Engine. Follow him on Twitter @jasemurphy.