The government says it can persuade parliament to pass legislation backing a youth internship program that's already started, despite staunch opposition from Labor and the Greens.
If the legislation doesn't pass, the young jobseekers taking part in the PaTH program could lose up to $42 out of the $200 fortnightly dole top-up in tax.
"We are very confident of being able to take this through the Senate based on our record of getting things through the Senate," Treasurer Scott Morrison told reporters in Canberra on Tuesday.
The program, announced in the 2016/17 budget, seeks to encourage jobseekers under 25 to do four-week to 12-week internships by paying them $200 a fortnight on top of income support payments and giving the employer a $1000 upfront payment.
It began on April 1 despite the backing legislation yet to pass the Senate.
The legislation is needed to ensure the $200 payment, which comes on top of a young job seeker's social security payments, is not taxed as income for work.
It will also mean anyone who drops out of the program for whatever reason can have their social security payments restored without having to make a new claim.
Employers say the PaTH program is a practical plan to help address youth unemployment.
Business Council chief Jennifer Westacott said the scheme would give young people practical work experience and the support and skills to stay in work.
But unions say it will undermine jobs.
"If employers can legally employ people on $3.22 an hour and the government pays, why would they hire a young person on the minimum wage?" ACTU secretary Sally McManus said.
Labor spokesman Ed Husic said the 30,000 subsidised interns would be forced into a weak labour market already suffering from record high under-employment and record low wages growth.
Mr Morrison said Labor should put its stop sign away and help attempts to get young people into jobs.
"Whether it's trying to get businesses growing, whether it's trying to get young people into work they are constantly saying stop, stop, stop," he said.
"That's no way to grow an economy."
