Young people should be allowed to opt out of the Fair Work system and negotiate their own pay and conditions with employers, according to Family First Senator Bob Day.
In a bargaining offer to the Abbott government, Senator Day says he will reverse his staunch opposition to the Coalition's plan to make young people wait six months for welfare if they adopt his proposal.
The Coalition is struggling to get the majority support needed in the Senate for one of its most controversial budget measures, with Labor and the Greens opposed to the six-month Newstart wait and support hard to find on the crossbench.
Senator Day is lobbying fellow crossbenchers to back his plan to let young people negotiate their own work conditions, which he says will give them the start they need in the workforce.
The South Australian said young people should be able to bargain with employers to work for less than the minimum wage and to waive conditions such as sick pay, holiday pay or unfair dismissal protections.
He described his plan as a ''silver bullet'' that would create revenue through more taxes and solve social welfare problems.
''Why are we denying people the option of taking jobs under terms and conditions that suit them?'' he told Fairfax Media.
This comes as the jobless rate for 15 to 24-year-olds reached 14.1 per cent in figures released earlier this month.
Senator Day, who has support from Liberal Democratic Party Senator David Leyonhjelm for his measure, said the government had to ''let people opt out of the system''.
Senator Day was defiantly opposed to the government's current proposal to make young people wait six months to get unemployment benefits.
He said the government should stop ''being obsessed'' by young people who didn't want to work and put its efforts into those who do.
But if the Coalition supported his idea, then Senator Day said he would in turn back the government's plans to make people wait six months for Newstart, arguing this would only target the people who did not want to work.
Senator Day said he ''did not give a rats'' about employers, arguing they were big enough and ugly enough to look after themselves.
He said he was worried only about the potential employee, saying it should be ''100 per cent up to them'' to work out what conditions they were prepared to work under.
He dismissed concerns that young people might be exploited under his plan, noting that many of them were in an ''unemployment prison''.
Senator Day said it was a ''waste'' of time to deal with big business with his proposal and was targeting small business instead.
But Council of Small Business of Australia executive director Peter Strong has labelled he opt-out idea as ''bordering on anarchy in workplace relations''.
Mr Strong said Senator Day's proposal could see employers take advantage of young job seekers.
''That is a bit too chaotic for my liking,'' he said.
''We should have a system where you can't accidentally take advantage of desperation.''