English said only about 10 per cent of young people on the unemployment benefit stayed on it for more than six months, but many of those who did ended up on it for years.
He said the sanctions were an effective tool - currently 95 per cent of those who received a warning of sanctions would act to meet the requirements.
National's social development spokeswoman Anne Tolley said it would begin from July next year. Each young person would get one-on-one help to place them in work experience or training.
Asked if enough places could be provided to offer the drug rehabilitation, Tolley said it could take a while to get up and running but she was confident it could be done.
"One thing we have found is that when you are out there with money buying those services, it's amazing how quickly the arrive.
"So yes, we are confident. It might be a bit slow getting up and running but we are confident there are people out there who will take up those opportunities."
Labour leader Jacinda Ardern said there were more than 70,000 young people not in employment, education or training.
"And now, two and a half weeks out from an election the government has finally seen that as a problem. It is too little, too late."
Ardern said she didn't agree with increasing sanctions for a particular group.
"These young people need opportunities. They need the ability to get that first job. That's what we should be focusing on. There is already a sanctions regime in place."
English said a harsher regime of sanctions for young unemployed people who turned down training offers or repeatedly failed drug tests was justified and those young people need to take some responsibility.
"If they can get some training, if they are able to show up for work then they'll probably get a job."
In 2015 English was criticised for saying employers had told him some young unemployed people were "pretty damned hopeless" and did not turn up to work.
English said National was willing to put in the time and money to get them ready for work - but they would have to take responsibility as well.
He said there were about 16,000 under 25 on the unemployment benefit and of those about 8000 already did training or work experience.
The $73 million package included ensuring there would be work experience or training for all under-25s who had been on the benefit for more than six months and financial management training.
It would also offer drug rehabilitation for those who could not get a job because of drug use - about one in five beneficiaries surveyed by Work and Income had said that was a problem for them.
"In return, they need to take some personal responsibility.
"That meant those who did not take up the offer of training or rehab, or continued to fail drug tests would have their benefit cut in half. The way they could spend that money would also be restricted to the essentials such as food and rent.
"We now want them to take responsibility for the decisions they are making."
He said sanctions had worked well across the wider welfare system - 95 per cent of those who were warned sanctions would be applied had acted to meet their obligations.
The sanctions would not apply to those with children and case managers would use their discretion if there were other relevant circumstances.
