Nearly all of the jobs that will open up to retail workers taking part in the controversial PaTH scheme will come from people switching work instead of newly created employment, the government has admitted.

In July, Malcolm Turnbull announced that 10,000 retail internships would be offered under the $750 million program, heralding the placements as a first step to unemployed young people “realising their dreams”.

But as the Prime Minister was spruiking the scheme, the Department of Employment sensationally acknowledged in internal documents that most job opportunities in the sector would be the result of workplace churn.

“It is important to remember that employment growth isn’t the only source of opportunities for people looking for work,” the department said in a ‘Q&A’ document obtained by The New Daily under freedom of information laws.

“Job turnover provides more opportunities for people than does employment growth.”

Employment Minister Michaelia Cash’s department estimated the sector would create just 88,900 sales assistant and salesperson roles in the five years to November 2020, the document shows – a fraction of the 676,100 openings expected through employment turnover.

Under the PaTH scheme, the government pays employers a $1000 lump sum for each intern it takes on for up to 12 weeks, and a larger payment for interns who are ultimately offered a permanent role.

Participants in the program receive $200 each fortnight on top of their Centrelink payments, or about $4 per hour – a rate of pay critics have likened to slavery.

Jim Stanford, an economist who leads the Centre for Future Work in Sydney, told The New Daily he was not surprised by the department’s internal forecasts.

“A ‘make work’ program which tries to give one group an advantage in competing for a share of a declining total quantity of jobs, is obviously not contributing to economic growth,” he said.

“It is simply reallocating unemployment. The problem of unemployment in Australia can only be addressed by expanding the total number of jobs. The PaTH program will have no impact at all on that.”

Jeff Borland, an economics professor at the University of Melbourne, agreed that without net job growth, “the hiring that takes place of one type of job seeker means that other job seekers are excluded”.

The information obtained by The New Daily suggests that the government has in fact tacitly acknowledged the risk of paid employees being displaced under PaTH, albeit on a minor scale.

Responding to a question on what “safeguards” are in place to prevent worker displacement, the internal documentation states: “The broader labor market is significantly larger than the number of participants in the program.”

According to ABS data, each year in Australia there are approximately five million movements into employment.

Sally McManus, secretary of the Australian Council for Trade Unions, claimed that the department’s own words were an admission that the scheme would hurt workers.

“The advice from the minister’s own department clearly acknowledges that 30,000 real jobs will be lost through this scheme,” she said.

“The minister is knowingly presiding over a program which will replace 30,000 real jobs with dead-end internships that pay $4 per hour and have no workplace rights.”

The Turnbull government unveiled PaTH – standing for prepare, trial, and hire — in the 2016 budget, announcing 10,000 internships in partnership with the Australian Retailers Association in July, followed by 10,000 hospitality placements in August. As of last month, just 200 participants had found regular employment since the program kicked off in April.

When contacted by The New Daily, the Employment Department defended the scheme, saying it helped young people gain valuable employment experience and was being closely monitored for its impact on the job market.

“To be eligible to host an internship businesses first agree, under an internship agreement, to have a reasonable prospect of employment for the young person following the internship and to not displace workers,” a spokesperson said.

“The department monitors internship placements for displacement through detailed data analytics, specific desktop monitoring, targeted audits, participant surveys, tip offs and feedback through the National Customer Service Line.”