The Federal Government's plans to drug test welfare recipients has been compared to a similar policy in New Zealand, but welfare organisations in the country say the program has been far from successful.

In New Zealand, welfare recipients are drug tested as a precondition for getting certain jobs.

But Ross Bell, the executive director of the New Zealand Drug Foundation, said the program has fundamentally been "a waste of time".

"Of the many, many thousands of people who have been referred for drug tests, a very small minority are failing these tests," he said.

"Over a three-year period since this scheme's been in place, we've tested about 95,000 beneficiaries. Only 450 failed the drug test."

Given the results, the director of addiction services at the Salvation Army in New Zealand, Lynette Hutson, said she is surprised that Australia is pursuing the policy in any form.

"There's a little pool of international evidence that's saying: 'well, really, this is possibly not the best use of funds'," she said.

"And so it is a little bit surprising that Australia would be going down this line."

As part of the federal budget, the Government announced it will test 5,000 new Centrelink clients, and that those who test positive will be forced onto an income management scheme.

Young people deemed to be at risk of substance abuse will be required to undertake random saliva, urine or hair follicle tests for drugs in three locations from next year.

Drug testing will 'stigmatise people'

The trial has been compared to New Zealand's policy, but Mr Bell says there are some big differences.

"What we simply have in New Zealand is: companies that already have pre-employment drug testing: if a beneficiary is referred for a job interview at that place, which already has the testing, and they fail that test, then that employer can invoice the government welfare agency to cover the cost," he said.

Mr Bell said that while a "clever politician" might argue that the low test failure rate in New Zealand showed drug testing acted as a deterrent, he could not buy that theory.

"A whole lot of research shows this: the majority of people on welfare simply are looking out for the best in life. They want work," he said.

"So this is going to stigmatise people. It is putting more pressure and stress on people who are already vulnerable.

"And these are people who aren't able to fight back."

Ms Hutson said the policy has not been helpful to people who have addictions.

"If there are people who do have addictions, if there are people who are beneficiaries and they need drug and alcohol treatment, we would rather that that not be the way that they get forced into accessing treatment," she said.