Youth unemployment is an issue that has increasingly troubled western countries since the 1970s. This paper provides data on youth unemployment in Australia and the Netherlands, and discusses government policy in both countries. The rate of youth unemployment was similar in both countries in the mid 1980s, but since then it has declined dramatically in the Netherlands, while changing little in Australia. Youth unemployment policy in Australia has been driven by the concept of obligation, while in the Netherlands youth unemployment policy has been organised around the principle of a guarantee for youth. The Dutch labour market programme offers more continuity and coherence than the rather ad hoc Australian programmes. However, the paper argues that youth labour market policy in both countries is of a controlling nature, and does not serve marginalised youth. Moreover, policy in neither country meets OECD criteria for effective labour market programs. The paper concludes with the description of a Dutch program which, to a large extent, does meet the OECD criteria, and demonstrates that a more constructive approach to youth unemployment is possible.