Business New Zealand chief executive Kirk Hope said there is going to need to be "some fairly comprehensive training" for the work ready scheme to be "successful".
Yesterday, Regional Economic Development Minister Shane Jones told TVNZ 1's Q+A said he'll push through a work-for-the-dole scheme to get people out of the welfare system.
However, Mr Hope said in order to get them into a work ready state, people needed to be provided with some basic capability and some basic training in the first place.
"I guess you would classify that as an investment as opposed to what Mr Jones described as 'people sitting on the couch,' so again the idea is you enable people to be work ready and then into work and then into the next job so they don’t have to go back on the dole."
Mr Jones will be taking his work-for-the-dole scheme to Cabinet as he is "sick and tired" of watching people who are not in education, employment or training.
Mr Hope asked "what are the skills these young people are going to come out of this job with in order for them to go on to the next job, for them to not go back in to welfare, because that’s the objective here."
Mr Hope said it is not a good idea to remove people from the benefit altogether if they refuse to work.
"The whole idea about young people who aren't in employment, education or training are at high risk of entering into criminal behaviour. If you remove their ability to have any money or participate at all, are you just driving them into criminal behaviour?"