As unemployment drops to levels New Zealand has not seen in well over a decade, focus is shifting to the groups who continue to have difficulty finding a job.

Young people figure prominently among the unemployed - Statistics New Zealand's Household Labour Force Survey shows about 40,000 people under 25 out of work. However, the news is not all bad. The proportion has been falling in the 10 years, though not as fast as for other groups in the population.

Last year, for instance, the unemployment rate for 15 to 19-year-olds averaged 15 per cent - considerably higher than the 5.2 per cent rate for the population as a whole - but well down on the 22 per cent average rate recorded in 1992.

The obvious question arising from the figures is: why are young people still more likely than older job seekers to be out of work? Especially when we consider that the economy is growing at 4 per cent-plus annually. And what is the Government doing to turn these statistics around?

The evidence suggests that too many young people stop formal learning too soon and lack the basic skills needed in the modern workforce.

We need to engage senior school students with a wider range of educational opportunities and expose them much more to the disciplines and skill needs of the workplace before they leave school.

We also need to build a broader range of bridges to work in recognition of the fact that school is not always the best learning environment for some young people.

A commitment to building these bridges was a major element of the Labour and Progressive manifestos in 2002 and we intend to make significant progress in this parliamentary term.

The Government has formally committed itself to introducing an education and training leaving age to ensure that all 15 to-19-year-olds are engaged in education, training or have a job.

This will involve expanding programmes like Modern Apprenticeships and Gateway (which enables senior school students to gain work experience and start vocational qualifications while at school) and introducing new programmes.

We will also improve the support available for young people completing youth programmes offered through Work and Income once they have finished their courses and are looking for or starting work.

We do not intend raising the school leaving age, but we do expect that some young people who would have left school will stay on because they can mix school and work-based study and, for example, build credits towards an apprenticeship.

Work is also under way to improve the information young people have about the labour market. We need to make quality, relevant information readily available to young people about the skills employers look for so they can make good decisions about courses of study, work experience options and the like.

Recently, I launched the Business Council for Sustainable Development's Business Guide to Youth Employment, which is an excellent example of the business community coming together to share best practice.

Similarly with local government we have signed a formal memorandum of understanding to co-operate in achieving our goal of having all young New Zealanders in education, training or work by 2007.

The Actionworks and Youthworks programmes we take part in with the Canterbury Development Corporation are examples of how this is working in practice.

These two projects underscore the other essential partner - business. Employers cannot afford not to pay attention to their bottom line, and young people will often require more supervision and will initially be less productive than older workers.

Nevertheless, as the Business Council points out, employing young people makes good economic sense. Tomorrow's workforce is at school today, and unless we engage them in the world of training and work, as the decline of apprenticeships has shown, skill shortages quickly emerge which stifle business growth.

We need to engender a conscious recommitment on the part of employers to take on young people and use their talents.

New Zealand's future is in the hands of our young people, but if we do not act now to give young people a sense of purpose and a real start to their working lives, that future will be much less rosy.

The Government intends to act.

* Steve Maharey is Minister of Social Services and Employment.