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Here's Everything We Know About The Government's $4 An Hour Internship

Newstart + Internship $ = less than minimum wage.

The government's plan to pay young people as little as $4 an hour to work in short-term internships has ruffled a few feathers.

Australian Government / Via budget.gov.au

Until last night the government thought young people would like its Youth Jobs PaTH policy because it would help them get "real jobs".

Saeed Khan / AFP / Getty Images

Employment minister Michaelia Cash is angry at the public backlash to her program, insisting it is a win for both businesses and young people.

She has said it will allow young people to become "more competitive in the Labor market", and she expects youth unemployment to fall as a result.

Cash also backed treasurer Scott Morrison's comments that "the best form of welfare is a job" in Senate question time on Wednesday.

But unions don't agree. They've compared the PaTH internships to sweatshops.

"Paying young workers $4 per hour is not far above the rates in third world sweatshops – it's outrageous and it puts our entire wage system at risk," ACTU secretary Dave Oliver said.

To clarify: you get $4 an hour on top of your current welfare payment for the duration of your four to 12 week PaTH internship.

Stefan Postles / Getty Images

For a case study, let's look at "Malcolm".

He's 25, single, has no children and is unemployed.

Malcolm gets $263.80 a week on Newstart and after six weeks of unemployment he decides to do a PaTH internship.

Australian Government / Via budget.gov.au

His PaTH internship pays him an additional $100 per week.

$100 is a flat rate.

Malcolm could be working anywhere between 15 and 25 hours per week, so it works out to between $4 and $6 an hour.

To put that in perspective, the current minimum wage is $17.29 per hour. That means that by hiring Malcolm, instead of a regular employee, a business would save up to $432.25 each week.

At the end of the week, Malcolm pockets $363.80.

Even if you take into account the money received from Newstart (which is welfare, not a wage), young people on PaTH will still be getting up to $68.45 per week below the minimum wage for hours worked, with no casual loading, superannuation or penalty rates.

Lukas Coch / AAPIMAGE

Charities are worried PaTH will leave the more than 250,000 unemployed 15 to 25 year olds with not enough money to survive.

"A good Budget would not leave people who are unemployed or insecurely employed to wage a daily battle for survival from below the poverty line," said national CEO of the St Vincent de Paul Society, Dr John Falzon.

"Even the likes of the OECD and KPMG call for an increase to Newstart," he said.

Prime Minister Malcolm Turnbull has dismissed criticism that the internship program is a "new slave trade".

Richard Wainwright / AAPIMAGE

"This is about ensuring that young people who are unemployed get a start. It ensures that they get the training they need to be job ready and then they get the opportunity to be an intern and get the experience of working in a workplace," Turnbull told ABC Radio on Wednesday morning.

He said "time will tell" how effective the program will be.

"Since when did you need an internship to stack a supermarket shelf?" Labor's employment spokesman Brendan O'Connor told Buzzfeed News.

Australian Government / Via budget.gov.au

"A taxpayer-funded four week supermarket 'internship' paid below the minimum wage, is no replacement for a four-year apprenticeship or a real job."

The government says the internship is "opt in", but the Greens are concerned that young people might not get a choice.

Dan Himbrechts / AAPIMAGE

"People shouldn't be fooled by the rhetoric that this is voluntary," Greens Senator Rachel Siewert told BuzzFeed News.

"Because if a Job Service Provider puts it into a person's job plan, it essentially becomes compulsory as penalties apply if someone doesn't support their plan."

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