Indonesia's government has approved $US26 million ($A29.43 million) in cash aid to help victims of a massive earthquake that may have left thousands dead on the island of Sumatra, the finance minister said on Thursday.

Sri Mulyani Indrawati said the allocation of 250 billion rupiah would be enough for two months of relief operations in the area of the Wednesday quake, which caused devastation in the coastal city of Padang and its surrounds.

The 7.6-magnitude quake would likely hurt the domestic economy and affect Indonesia's state budget, Indrawati said.

Padang is home to nearly one million people.

"It will certainly have an effect as Padang and the surrounding areas are areas that have potential to contribute to the economy and the budget," she added.

At least 529 people were killed in the quake, officials confirmed, but that figure is expected to rise as thousands remain trapped in collapsed buildings.

Officials said they were suffering from a desperate shortage of heavy machinery, but added that aid including tents, blankets and medicine had been sent to the disaster site.

Meanwhile, aid organisations in Australia say that Indonesians rocked by back-to-back earthquakes need the Australian public's help.

Oxfam is sending emergency staff and supplies in response to Wednesday night's deadly earthquake in Sumatra.

Oxfam spokesman Chris Roche said the organisation was working with local aid providers to distribute 2,400 tarpaulins, as well as hygiene kits and clothing.

"Our staff will now be working with local authorities and other agencies to ensure that aid gets to where its most needed quickly, and reaches those people most in need," he said.

But Mr Roche said Oxfam needed the public's help, too, and appealed for donations.

"Responding to these disasters will stretch Oxfam's resources," he said.

Caritas Australia's chief executive Jack de Groot said the Catholic aid agency's local Indonesian partners were experienced in dealing with the aftermath of earthquakes and had responded promptly.

"However there will be a need for medical support to victims, tarpaulins and tents for temporary shelter," he said.

Caritas is also accepting cash donations which Mr de Groot said would focus on the long-term rehabilitation of the affected population once their immediate needs were met.