Government's cycleway youth jobs fund shelved

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A $5 million government fund to employ young workers on cycleway projects has quietly been shelved after delivering just a quarter of the jobs envisaged.

Prime Minister John Key and Social Development Minister Paula Bennett announced the $5.3m package as part of a larger programme of youth employment schemes at the National Party conference last year.

It was to subsidise an estimated 500 youth working on the Government's cycleway project, paying them the minimum wage for up to 30 hours a week.

However, Budget documents just made public show it was dismantled before this year's Budget because only $800,000 was spent and just 123 youth were employed under it.

The unspent $4.5m was siphoned off to boost another jobs subsidy programme for youth – Job Ops, which gives employers $5000 for each 16 to 24-year-old they take on for at least six months.

When announcing the cycleways fund, Mr Key said it would boost regional employment and encourage those developing the various "Great Rides" that make up the cycleway to employ an age group that made up a third of all people on the unemployment benefit.

Yesterday, Labour leader Phil Goff said dismantling the cycleway fund was another embarrassment for the prime minister over his "grand idea" for creating jobs.

"It's hugely embarrassing. They made an undertaking to provide 500 jobs for young people on cycleways, which was his grand idea, and they haven't even delivered a quarter of that. The truth is this is all rhetoric and no delivery."

A spokeswoman for Ms Bennett said more than 170 young people were expected to be employed on the seven cycleway projects in the Southern, Nelson, East Coast and Waikato areas.

Where appropriate, they would be funded from some other general employment assistance funds.