Finance Minister Steven Joyce says Gareth Morgan is sending the wrong message with his proposed policy to give all young people an unconditional state-funded basic income of $200 a week after tax.

Mr Morgan's Opportunities Party launched the policy on Tuesday, saying everyone aged 18 to 23 would be eligible and they wouldn't be stood down, drug tested or examined.

"The youth UBI is designed to give any young person the sort of security they need to learn, search for work, pursue a career or undertake any sort of volunteer or community work without the fear of being penniless," the party said.

READ MORE: Opportunities Party promises $200 a week to young people

Mr Joyce told reporters Mr Morgan was "heading in the wrong direction".

"I think it's the wrong message to send to young people - here's $200 a week and you don't have to do anything," he said.

"We're generating 10,000 jobs a month, we've got towns crying out for staff, there's a stack of opportunities."

The Opportunities Party says the UBI would "a right for everyone from age 18 to their 23rd birthday".

The party already has a UBI policy for families with children under three and people over 65.

It says budget surpluses announced by the government this year have made the extension possible.

"National's across-the-board tax cuts must be abandoned in the interests of supporting a group who struggle with the highest suicide rate in the OECD and pressures of ongoing inter-generational inequity," the party said.

The Union of Students' Associations praised the announcement.

"NZUSA has long called for a universal students allowance," union president Jonathan Gee said.

"Means testing for student allowances has proven invasive, inefficient and unreflective of the financial independence of many young people."

Mr Morgan launched the party in November last year.

It's polling at about one per cent. It will need five per cent to get MPs into parliament.