Unions fear a planned internship scheme could undermine Australia's entire wage system with interns earning only $4 an hour.
Under the plan unveiled in Tuesday's budget, young unemployed people could get a $200 top-up to their fortnightly welfare payment if they participate in a business-led internship program.
While the measure has been cautiously backed by social services groups, unions have slammed it as a "$4 an hour" US-style internship program.
ACTU president Ged Kearney told reporters on Thursday that by allowing a real vacancy to be filled with an intern position the government has laid bare its intention to undermine wage and employment systems.
JobPaTH program will allow internships to replace fully paid, legitimate jobs and take advantage of young and inexperienced workers, she said.
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"Youth unemployment is an issue that must be addressed ... Not hastily cobbled together free labour scheme for big business," she told reporters in Melbourne on Thursday.
However, the federal government says the scheme has protections to stop employers turning it into modern-day slavery.
Employment Minister Michaelia Cash sought to quash concerns about potential rorting of JobPaTH by outlining safeguards that include offering internships only to companies that have an existing vacancy.
It also requires that existing employees are not displaced by the interns.
"All the laws apply to this program, as they apply to anything else. There will be rules in place," Senator Cash told ABC radio.
