Starting their tour of Europe in the worst possible fashion, the Wallabies were whipped 26-16 at the Stade Velodrome in Marseille by a determined France side.
Jones believes the team are playing without confidence and will need to put in a tremendous amount of work if they are to get take home any success from the tour.
"I'm probably more disappointed than during the Tri-Nations because we didn't play with much confidence," he said on ABC Online.
"Confidence is so easy to lose and so hard to get back and at the moment we haven't got any. We had what we thought was a very good preparation but we didn't play with much confidence and the game is lost."
The Wallabies were considered almost unbeatable at the turn of the century, but Jones now concedes the spark has gone.
"There is no magic. We just have to work hard. It's the responsibility of the coaching staff to have the players right. I take full responsibility for that," Jones said.
Captain George Gregan, who became the most capped player in rugby with 115 internationals, backed up the sentiments of his coach, and laid some of the blame squarely on his own shoulders.
"Confidence is definitely something you have to work at and when you are losing, you have to work harder to get it back. It's a domain where I have to take partial responsibility as a captain," he said.
"Without confidence, you don't have momentum and momentum is something the Australians have historically played well on."
Australia now head to Twickenham for a clash with world champions England on Saturday, where they will try to restore some pride in the green and gold jersey.