A "zero-tolerance" policy will see teenage drivers fined $200 and issued 50 demerit points for any positive test for alcohol.
It is understood the Land Transport (Road Safety and other Matters) Amendment Bill will punish young drink-drivers if they test within the current youth alcohol limits.
The youth limit is 150mcg of alcohol per litre of breath, or 30ml of alcohol per 100ml of blood (referred to as 0.03).
Previously, any teenager caught with alcohol levels within the youth limit was free to drive away.
However, some critics say the proposed punishment is not enough of a disincentive, and others say it could see teenagers being fined for driving the morning after a few drinks.
Transport Minister Stephen Joyce defended the Bill, saying it had always set out a punishment of a ticket and demerit points for youths with "low" alcohol levels.
"Fifty demerit points is halfway to a mandatory disqualification with 100 demerit points ... it's significant," he said.
Alcohol Healthwatch director Rebecca Williams supported the penalties because she believed it would make police more likely to enforce the law without bogging down the criminal system.
A "quick, sharp kick in the pants" would be all some teens needed to change their behaviour and would save them from a criminal conviction at a young age, she said.
Labour Transport spokeswoman Darien Fenton said she was "deeply concerned" about the Bill and how quickly it was being pushed through Parliament.
"I would have thought there would be something pretty serious to really, really discourage young people from [drink-] driving ... it doesn't sound like a deterrent to me."
Automobile Association motoring affairs spokesman Mike Noon said the "sensible tolerance" of 0.03 allowed for teens who might have done the right thing by sleeping alcohol off before driving but had been caught with residual alcohol on their breath the morning after.
"Otherwise, you're criminalising someone and giving them a drink-driving conviction which would be on their record forever for a limit which is substantially lower than the adult limit. That's not fair."
The limit also saved teens from being charged for failing the test over anomalies including mouthwash, homemade ginger beer and some chocolates which might get picked up in a breath test, he said.
Catherine Peary, whose 22-year-old daughter Amy-Rose Allen died while drink-driving, was astounded to learn of the fines.
"That is too soft - they need to toughen up," she said yesterday, five months to the day since her daughter's death.
"You've got to be cruel to be kind. We can't put cotton wool around our children anymore. The law has got to be hard ... they need to learn lessons."
She would like to see a "boot camp" type prison experience to punish teen drinkers in the hope it would make them change their ways.
"A month in prison could save their lives - what's a month on hold? But $200 - it's pittance. It's ridiculous."
Teen drink-driving
THE LIMITS
• 150mcg of alcohol per litre of breath or 30mg of alcohol per 100ml of blood.
THE PUNISHMENT
• Now: Drivers aged under 20 within those limits are free to drive away.
• Proposed Bill: Drivers aged under 20 within those limits will be fined $200 and issued 50 demerit points.
