Speaking at the start of the federal election campaign, Mr Keating, whose Labor party is trailing in the opinion polls, promised to bring schools and the workplace closer together. He also pledged to cut youth unemployment to 5 per cent over the next five years. Currently more than 25 per cent of Australian young people who have left school to look for full-time work are unemployed.
The prime minister said the youth policy was the most important issue for Australians to consider when they went to vote on March 2. The policy contained a "historic commitment" to provide education, training or employment for all 15 to 19-year-olds.
"We recognise our primary duty to our children and we know that the nation's interests depend on them," Mr Keating said. "We recognise that young Australians have special problems and special needs."
Under the $210 million (Pounds 106m) youth scheme, employers would be assisted to take on students as part-time trainees while they were still at school. In addition schools would be encouraged to develop more vocational courses for pupils.
Young people would benefit from better workplace training through the creation of 15,000 work placements for secondary pupils under a new Australian Student Traineeship Foundation.
School-leavers who complete vocational courses will be guaranteed jobs under a programme designed to ease the transition from study to work. The government is going to offer 100 awards of $2,000 each to pupils who excel on these courses in another attempt to convince people that vocational training is a route to a good job.
Mr Keating also announced a two-year, $24m youth enterprise strategy to help young people develop business skills. This would include assisting more than 1,000 unemployed 18 to 25-year-olds to set up their own businesses.
Among other measures, the Prime Minister promised to provide greater input for youth in decision-making, including setting up an advisory body - the Young Australia Group - to better co-ordinate government youth policy. At least $1m would be spent on setting up Youthnet, a site on the Internet to distribute information on services for young people.
Almost $10m will also be used to expand the Australian Broadcasting Corporation's youth radio station Triple J so that every town of 3,000 or more people would have access to it. Mr Keating said the radio station was an influential and unique cultural asset for young Australians and young performers in particular.
Young indigenous musicians would benefit from a promise of more than $800, 000 over four years for an annual Indigenous Youth Music Festival.
In an appeal for youth support, the Prime Minister cited the environment, anti-nuclear initiatives and the move by Australia to become a republic.
He promised $10m for a national media campaign with an unambiguous message about the dangers of illegal drugs. It will aim at areas where teenage drug use is rife by providing grants for community programmes.
Welfare, youth and business groups welcomed Mr Keating's announcement. The Australian Council of Social Service said the initiatives would boost youth job prospects.