Treasurer Scott Morrison has warned anyone who is unemployed and refuses to take a job should not get the dole.
Government figures provided to News Limited showed nearly 36,000 people across the nation have quit jobs or knocked back job offers so they can put their feet up on welfare.
"If they knock back those jobs, they are not taking those jobs, then they shouldn't be getting the dole," Mr Morrison told the Ray Hadley program on Sydney's 2GB radio on Monday.
Acting Opposition Leader Tanya Plibersek said anyone taking advantage of the social security system should have the book thrown at them.
She said there is no excuse for choosing not to work, although most people who are receiving unemployment benefits are desperate to find work.
"If someone is rorting, they should have to book thrown at them but let's have a government that's serious about supporting jobs for Australians too," she told reporters in Sydney.
Mr Morrison said the government had been trying to get legislation from the 2015/16 budget passed that would put in place a four-week waiting period for the youth allowance.
"So that means you can't go from the school front gate when you leave school to the Centrelink front door," the treasurer said.
"Labor should support this, the crossbenchers should support this."
It was originally a six-month waiting period under a proposal in the 2014/15 budget but proved unacceptable to the Senate.
Meanwhile, the Productivity Commission is seeking submissions into its inquiry into reforms to human services, which aims to apply competition principles to the sector as recommended by the Harper review.
Six areas have been identified - social housing, public hospitals, end-of-life care services, public dental services, services in remote indigenous communities and government-commissioned family and community services.
Submissions are due by February 10, 2017.
