Employment Minister Eric Abetz concedes the economy needs a reboot after the jobless rate struck a 12-year high of 6.3 per cent.
He believes the government's infrastructure program, if rolled out as planned, will see a surge in employment opportunities.
"Clearly we need to reboot the Australian economy," Senator Abetz told reporters in Adelaide on Thursday.
The steady rise in unemployment is a blow to Treasurer Joe Hockey as he tries to get the federal budget back in order.
Rising unemployment not only meant less income tax revenue, it was usually indicative of softer economic activity, which meant less company tax receipts, Senator Abetz said.
It was imperative the budget be brought back to surplus, he said.
"But we have to do it in a sensible, moderate way."
Opposition Leader Bill Shorten is worried that young unemployed people face a bleak Christmas.
"There is no doubt that this is becoming a real crisis," he told reporters.
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