Economists are forecasting the unemployment rate to soar to between 10 per cent and 15 per cent due to mass job axings across retail, travel, hospitality, entertainment, sport and leisure.

Asked about the prospect of stronger wage support for businesses, Finance Minister Mathias Cormann said the government was working to "significantly expand" income support through business.

"We are going to provide the best possible support that we sensibly can to support business to support Australians who are deeply impacted by this crisis," Senator Cormann told the ABC Insiders program on Sunday.

"We are looking very hard on further expanding the level of income support through businesses to enable more businesses to stay in hibernation or to survive through this difficult period ahead [and] for a strong bounce back on the other side."

Senator Cormman said it would be done in an "Australian way" through the existing tax and transfer system so payments could be delivered quickly.

He said it would "not be responsible" to adopt an entirely new system like the UK wage subsidy model, because it would be too slow to set up and inject money into businesses.

The wage subsidies would typically be paid if a struggling employer keeps staff on the employment books and plans to give them work after the virus crisis passes.

Senator Cormann said that would be the "intention" of the extra support for employers.


Labor and economists have called for the government to pay large wage subsidies to help businesses cling on to workers and underwrite some of the private sector's $300 billion annual wage and salary bill.

The Australian Chamber of Commerce and Industry has been lobbying for an 80 per cent wage subsidy, based on a similar system to the UK, capped at average full time earnings of about $1600 a week.

Mr Morrison has said many businesses will need to go into "hibernation" for around six months. He has warned that banks, landlords, energy companies, governments and employees will need to make financial sacrifices so affected businesses can emerge unencumbered by large debts after the crisis passes.

Retailer Myer announced on Friday night it will close its stores from Monday and stand down 10,000 store and support centre staff, taking retail job losses from the COVID-19 crisis to more than 40,000.

Myer's decision mirrors similar moves by Solomon Lew's Premier Investments, Country Road Group, foot wear retailer Accent Group, jewellery chains Michael Hill and Lovisa, fashion retailers Mosaic Brands, City Chic and PAS Group, outdoor leisure retailer Kathmandu, homewares retailer Adairs and autoparts retailer Bapcor.

Canada on the weekend announced a 75 per cent wage subsidy for small and medium businesses, up from an initial 10 per cent, to encourage firms to keep workers on the payroll.

New Zealand is providing wage subsidies to employers of $NZ585.80 per week for full-time workers and $NZ350 for part-time workers.

Kiwi businesses are being asked to pay their employees 80 per cent of their pre-virus income.


If employers can't afford this, they are being asked to pass on the subsidy in full to their workers.

British Prime Minister Boris Johnson, who reported he was infected with the virus on Friday night, has pledged to pay 80 per cent of people's wages to firms that keep paying workers.

The UK scheme is capped at £2500 ($4900) per worker each month.

Mr Morrison had previously ruled out adopting Mr Johnson's UK scheme, saying during the week that Treasury was not advising it and that it would require a whole new system to be built.

Instead the government so far has used the existing tax and transfer system.

As part of the government's economic rescue packages announced earlier this month, it doubled the weekly welfare payment for the jobless to $550.

Mr Morrison also pledged tax credits to small businesses, worth on average about 20 per cent of their wage costs.

The payments were not contingent on firms retaining workers.


The government is providing between $20,000 and $100,000 to small businesses with annual turnover under $50 million and not-for-profit employers.

The employers will receive a payment equal to 100 per cent of the PAYG withholding tax paid to the Australian Taxation Office on behalf of workers, up from the 50 per cent initially slated.

The soon-to-be-announced wage subsidies will be more generous and be better linked to retaining staff.