The government has paid car wash businesses at least $171,000 to take on young interns who are paid as little as $4 an hour under a controversial unemployment program.
By the end of April, 171 young people had started internships at businesses with "car wash" in the name as part of PaTH, a voluntary government program for unemployed Australians aged 17-24.
Under the program, internships last from four to 12 weeks, with interns working up to 25 hours per week. The Australian government pays interns $200 a fortnight, which can translate to as little as $4 an hour, on top of their welfare payments.
Companies that host interns get a $1,000 "incentive payment" for each intern they take on, and can also receive a subsidy of up to $10,000 for each intern they later employ.
Of the 171 carwash interns, 85 successfully completed their internship and 69 ended up with a job. This means that 40% of people who started internships, and 81% of people who finished them, were employed.
The employment department declined to provide more recent figures.
Australian Unemployed Workers Union spokesperson Jeremy Poxon told BuzzFeed News the use of the PaTH program for low-skilled labour like car washing was "inherently exploitative", and complained that the program offered no firm promise of ongoing secure work.
"The PaTH program does nothing to address the structural problems keeping kids out of work; namely, the lack of jobs available in the labour market. Instead, it mostly serves to provide businesses giant subsidies, and a compliant pool of cheap labour, which drives down conditions and wages for all young workers in low-skilled industries," Poxon said.
A department spokesperson told BuzzFeed News the PaTH program helped young Australians get work experience to gain employment, and gave employers the opportunity to observe young people at work to see if they are right for a business before hiring them.
"We're told a lot of guff by the government that PaTH helps workers gain skills and experience but making kids wash cars for $4 an hour doesn't boost their skills or somehow magically fix what's broken in our labour market," Poxon said.
"Youth unemployment is currently at 12% and continues to rise. Yet rather than creating new, exciting opportunities for the growing number of young unemployed workers, through programs like PaTH, the government is actually making it harder for kids to secure dignified, meaningful, and well-paid work."
Poxon said the union had heard from a number of young people who entered the program and then were offered no work at the end of their internships.
"This is incredibly demoralising and humiliating for young people looking to secure their first job. Rather than receiving any real reward for their labour, they're just thrown back on the Newstart scrapheap after finishing an internship that they've been told will help them get ahead."
The department spokesperson said that 65% of interns were employed on finishing their internships, and a further 9.1% were employed within three months. Over 10,000 people have started internships, with 6,656 completed.
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