The federal and NSW governments were on Monday afternoon putting the finishing touches on a financial and mental health support package, as premier Gladys Berejiklian all but conceded Sydney's lockdown would be extended beyond Friday.

It came as one Sydney-based Coalition backbencher again called for the lockdown to be eased in areas without active cases, amid fears of business closures and long-term mental health consequences if restrictions were left in place.

NSW recorded 112 locally acquired cases on Monday, the highest daily number of new infections since the latest outbreak started in Bondi almost a month ago.

NSW health authorities remain most concerned about the high number of cases infectious in the community, and the virus' continued spread through Sydney's south-western suburbs.

A total of 63 people have been hospitalised, including 18 in intensive care. Four people were on ventilators as of 11am on Friday.

With Sydneysiders now facing prospect of lockdown restrictions for more than a month, the Morrison government is preparing to step in to provide additional support.

Mr Morrison said a new targeted support package was "pretty close" to being finalised when he spoke to Sky News on Monday afternoon.

The Canberra Times understands the package is set to be announced on Tuesday.

Mr Morrison hinted that the package would include further cash-flow boosts for business, which he hailed as one of the most successful economic relief and stimulus measures from the earlier stages of the pandemic.

"For NSW alone, that injected more than $10 billion directly from the Commonwealth government to support NSW businesses," Mr Morrison said.

"That was a very effective measure because it gave businesses a lot of confidence."

Mr Morrison on Monday signaled the federal government would also look to "strengthen" income support for workers who have lost income as the lockdown entered its fourth week.

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The government last week waived the liquid assets test on COVID-19 disaster payments, allowing more workers to access the $500 or $325 payments.

The looming announcement comes after Treasurer Josh Frydenberg last week rejected his NSW counterpart's calls for the JobKeeper wage subsidy scheme to be reinstated.

Shadow Treasurer Jim Chalmers said Mr Morrison needed to urgently reinstate JobKeeper - or offer "something better" - to support struggling businesses and workers.

"Every day that Scott Morrison delays means more workers and more small businesses are at risk," Mr Chalmers said.

"Every day that Scott Morrison goes to ground, and shifts responsibility, and hopes that somebody else picks up the tab, could have dire consequences for workers and small businesses in Sydney."

Australian Council of Social Service chief executive Cassandra Goldie said welfare recipients, who are currently ineligible from the Covid disaster payment, should receive a "top up" to their usual income support to help them through the lockdown.

Workers who had lost income due to the lockdown or border closures should also be able to access the emergency payment, Dr Goldie said.

"We are in 2020 conditions and the federal government needs to act as it did last year, to make sure people can cover the basics and stay safe," she said.

"We need to urgently deliver an income floor to ensure everyone affected by the pandemic has an income above the poverty line."

Liberal MP Jason Falinksi, who represents the seat of MacKellar on Sydney's northern beaches, told The Canberra Times that restrictions needed to be eased for the "large swathes" of the city which had no active cases so that "people, businesses and school children could get their normal lives back".

Mr Falinski feared that if restrictions were not lifted at the end of this week then viable businesses would shut their doors. He worried about the long-term mental health impacts for traders, their staff and families.

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