Job services system rejig 'to cost jobs'

Unemployment will rise because of changes to the job services network, the federal opposition says.

More than 250,000 unemployed people will register with new employment providers from Wednesday, following the Rudd government's $4 billion overhaul of the system.

Opposition employment participation spokesman Andrew Southcott says the transition period will cost jobs.

"Unemployment will be higher ... because we will have an employment services system which will not be operating at full capacity for six months," he told ABC Television.

"The government naively went for a big bang change in employment services and a large degree of those changes were unnecessary."

Treasury expects unemployment to hit 8.25 per cent by mid-2010, up from 5.7 per cent at present.

aap 1 Jul 2009