Frydenberg reconsidering Vic support plea, but state will have to contribute

Inside sources have revealed to The Standard the federal package will be put on the table if there is a significant state input and therefore an incentive for the State Government to avoid future lockdowns.

"There will have to be a state contribution, a significant state contribution or it will not happen. There has to be an incentive to avoid lockdowns," the source said.

At 7.30am: Federal Treasurer Josh Frydenberg is facing desperate calls from business and social services groups to step up and support locked down Victorians after saying he will listen to the state's request for JobKeeper-like support for workers.

The Victorian government has earmarked an extra $209 million to prop up Greater Melbourne businesses through a second week of the now-extended shutdown, taking the total support package to almost $460 million.

But thousands of laid-off city workers, particularly casual workers, are now facing at least a further seven days without a regular pay cheque.

While unveiling the initial $250 million business package on Sunday, Victoria's Treasurer Tim Pallas branded the federal government's refusal to chip in with financial support for workers a "disgrace".

Acting Premier James Merlino took a more measured approach on Wednesday, saying he would lobby the prime minister to reconsider his stance.

"I do hope that the Commonwealth will swiftly confirm that they will step up and provide that support," he told reporters.

"If they do not, I will be raising this directly at national cabinet on Friday."

Speaking in Canberra, Mr Frydenberg said he would give the state's request a fair hearing.

"I have a constructive relationship with him (Mr Pallas) despite his comments in recent days," he said.

"I will speak to him. The prime minister will speak to James Merlino. Our health officials will talk, and we'll consider that in due course."

Mr Frydenberg, who confirmed on Thursday discussions took place overnight, has hinted any decision to extend lockdown support would not be localised and instead involve a broader policy shift.

"What we need to think about, obviously given the pandemic is still with us, is how we approach this on a national basis," Mr Frydenberg said.

"It's not about Victoria, Western Australia or individual cases. We will stick to our principles."

The Kooyong MP noted lockdown-hit Victorian workers could apply for JobSeeker payments, with the removal of the regular waiting period and mutual obligation requirements.

But Mr Merlino said Victorian businesses and workers were crying out for more targeted support from the federal government.

"The ball is in the federal government's court," he said.

Australian Industry Group CEO Innes Willox while said the Victoria government package was welcome, for many businesses it wasn't enough.

"People are desperately worried about their livelihoods and their jobs," he told Nine Network on Thursday.

Asked if the federal government should step in, Mr Willox said it might have to because the state government can't carry the cost on its own.

"The longer this goes on, the deeper the damage will be and the more likely it will be that the federal government has to come in," he said,

"We really are going to need federal government support because the Victorian government isn't going to be able to carry this on its own."

Victorian Council of Social Service chief executive Emma King also said the federal government must step up.

"People are again missing shifts, losing their jobs and struggling to pay their bills," she said.

Australian Retailers Association chief executive Paul Zahra echoed the call for support.

"Victoria can't do this alone. The federal government has done a great job to keep businesses afloat through JobKeeper and we need them to step up to the plate again," Mr Zahra said.

The state Treasury department had estimated the seven-day statewide lockdown would cost the economy $700 million, a figure likely to blow out well beyond $1 billion even as restrictions ease for regional businesses.

Australian Associated Press