Victorians impacted by the coronavirus lockdown could be offered payments similar to Commonwealth cash distributed after fires and floods.
Treasurer Josh Frydenberg was adamant the state had the capacity to respond to its initial one-week lockdown.
But now the lockdown is being extended by another week across Melbourne, he is considering a disaster and emergency style payment scheme.
“There are options that we are considering and that is one of many that we have looked at,” Mr Frydenberg told ABC radio on Thursday.
“There is a need in Victoria for continued support.”
The treasurer is determined to pull existing levers to deliver temporary and targeted assistance.
Labor frontbencher Tony Burke said people hit by lockdowns across a number of states in the past had benefited from the JobKeeper wage subsidy, which had now ended.
“This is the first time we’ve had an extended period of time where sole traders, small businesses and casual workers in particular have been left with nothing to live on,” he told Sky News.
“Once you hit something that is seven days or more you are talking about an entire cycle of your rent, an entire cycle of your grocery bills, where you have zero income to pay for it.”
An outbreak of the Indian variant of coronavirus has triggered a seven-day extension to the Victorian capital’s lockdown, which was initially slated to end on Friday.
The state recorded three new locally acquired cases, bringing the total number of infections generated by the latest Melbourne outbreak so far to 63.
Acting Victorian Premier James Merlino has pleaded for extra Commonwealth help with thousands of workers and businesses copping the brunt of restrictions.
But the Morrison government is concerned a one-off package for the state could set a precedent for other states considering lockdowns when confronted with outbreaks.
Victorian Treasurer Tim Pallas has branded the federal government’s refusal to reinstate JobKeeper wage subsidies a disgrace.
Federal Treasury has estimated a city-based lockdown can cost $100 million a day.
But other estimates put the cost of the seven-day lockdown at $1.2 billion in lost business.
The state government is spending $459 million in business assistance over the two weeks of lockdown.
Prime Minister Scott Morrison and Mr Frydenberg spoke with their state counterparts on Thursday evening.
It is understood the federal coalition government favours assistance with nationwide implications rather than a large Victoria-specific funding injection.
Mr Morrison has rejected opposition accusations he is to blame for the lockdown because of a sluggish vaccine rollout and failure to seize control of quarantine.
“Decisions to implement lockdowns in states and territories around the country are solely and totally the responsibility of state and territory governments,” he told parliament.
There are also renewed calls for an overhaul of hotel quarantine after a man in Perth became infected by a fellow returned traveller in a room next door, the 21st breach in a hotel.
Talks between the Victorian and federal governments are progressing on a stand-alone quarantine facility, likely to be based near Avalon Airport.
Jane Halton, who undertook a major review of quarantine, said it was perplexing it had taken so long to increase capacity at the Howard Springs quarantine camp in the Northern Territory and to look at facilities in other states.