Businesses that hire unemployed young people will soon be paid at least $100 each week by taxpayers.
Legislation for the proposed hiring credit scheme will be debated in federal parliament this week.
Employers that take on jobless people aged under 30 will receive $200 a week, while those who hire people aged between 30 and 35 will receive regular payments of $100.
The federal government expects the $4 billion program to help create 450,000 jobs over the next 12 months.
Prime Minister Scott Morrison said people aged under 35 were four times more likely to have lost their jobs or had their hours cut during the coronavirus economic crisis.
“We also know from past experience that if young people lose work in a recession and can’t find their way back, they risk becoming a lost generation,” he said on Monday.
“We can’t let this happen. We must do everything we can that young people do not start their working life on welfare.”
Labor wants the program extended to all unemployed people but has indicated it will not stand in the way of the scheme.
Opposition Leader Anthony Albanese said Labor had no problem with young people being given support but was concerned 928,000 jobless people would miss out.
“The problem with recessions, if you go back, it is often older workers who lose their job, and some of them never work again,” he told Sky News.
“Too many people have been left behind during the pandemic by being left out of wage subsidies. We shouldn’t leave people out as part of the recovery.”
The prime minister points out Labor electorates are likely to be the biggest winners from the scheme, as they are home to high numbers of young people.