Prime Minister Scott Morrison is facing a push to enable support payments to flow through to people hit by lockdowns regardless of their length.
As Victoria prepared for a five-day statewide lockdown from midnight, Mr Morrison has flagged a new plan which would see people receive support payments from the second week of any state or territory lockdown.
Employees who have lost at least 20 hours of work a week will be given $600, while those who have lost less than 20 hours will get $375.
It would be paid in arrears from the start of the restrictions, and the liquid assets test won't be applied.
However, Victorian Premier Daniel Andrews wants the support to be paid on a pro-rata basis, rather than having to add two more days to his state's lockdown in order to qualify for the Commonwealth money.
"I want everybody to get a fair deal," Mr Andrews told reporters in Melbourne on Thursday.
"We are part of this nation and it's needs-based - it's not foreign aid, we are not a different country."
But Mr Morrison on Thursday night told Sky News premiers would need to agree to share the cost of any financial support offered for lockdowns under seven days.
"Here's the nub of it. If you're going to go have a shorter lockdown, fine."
"But the Commonwealth can't just be in this position of providing a blank cheque to that."
He said he was confident a "common sense arrangement" could be negotiated.
"The premier and I, we have a good working relationship, always have - doesn't mean we always agree on everything."
The Victorian Labor leader has previously raised concerns the package offered to NSW showed the federal government was giving a Liberal-led state government special treatment.
The highly infectious Delta variant outbreak in Sydney is nearing 1000 cases since it began in mid-June, with dozens hospitalised and some on ventilators.
Victoria has 18 infections linked to the Sydney outbreak, and 75 exposure sites.
"That's how fast this moves," Mr Andrews said.
Also under the federal support plan, eligible businesses can access weekly payments of between $1500 and $10,000.
They must show a 30 per cent fall in turnover and agree not to cut staff, while sole traders can access $1000 a week.
The federal government will turn the tap off when restrictions ease or the area is no longer a nationally recognised hotspot.
National cabinet is due to discuss the streamlined support at an online meeting on Friday afternoon.
NSW reported 65 additional cases on Thursday, and Sydney's lockdown will continue until at least July 30.
As the number of delivered vaccine doses rose to 9.63 million, the government revealed it was making progress on getting mRNA vaccines made locally, with an approach-to-market process closing on Friday.
However, Mr Morrison said there were still some issues around intellectual property held by Pfizer and Moderna which needed to be sorted out.
There's currently a glut of locally made AstraZeneca vaccine because of expert medical advice it be preferred for over 60s, due to the risk of rare but potentially fatal blood clots in younger recipients.
But Sydney's situation meant the federal government's immunisation advisory group ATAGI again updated its advice, saying younger people in outbreak areas should consider the AstraZeneca jab if Pfizer wasn't available.
The recommended wait time between AstraZeneca doses was also cut from 12 weeks to between four and eight.