The Illawarra can expect to see businesses go under during the next four weeks as the region remains in lockdown.
The NSW Premier Gladys Berejiklian announced the extension on Wednesday and Illawarra Business Chamber Executive Director Adam Zarth said some businesses won't come out the other side.
"We heard in our initial analysis of a statewide survey that we conducted at the start of a lockdown that only one in five businesses said they had enough cash flow to get them through a month in lockdown," Mr Zarth said.
"So now we're entering a very, very challenging period. We will see businesses close down and unlikely to reopen."
While Shellharbour is still in lockdown despite having no active COVID cases for more than a month, Mr Zarth said, there were locked down LGAs in Sydney in the same boat.
He suggested the way out of lockdown had more to do with where people worked rather than purely the number of COVID cases.
"It's got less to do without them and more to do with the interchange of population between the Illawarra and the danger parts of southwestern Sydney," he said.
"The government's strong assertion about the interchange in population between our region and that of the southwestern Sydney is undeniable."
Mr Zarth supported the NSW government's boost to the JobSaver program, though he noted it excluded sole traders.
He added that people needed to look at how they could help local businesses.
"There's the community approach - being out there supporting businesses as much as humanly possible with our neighborhoods is the number one message I think we need to send."
Meanwhile, workers who lose hours because of lockdowns will receive up to $750 a week under a boosted federal support scheme.
Coronavirus disaster payments for people who lose more than 20 hours will be increased from $600, with the new rate mirroring the original JobKeeper wage subsidy.
Workers who lose between eight and 20 hours will be eligible for $450, up from $375, while welfare recipients will no longer be excluded.
People on Centrelink payments will be eligible for $200 a week if they lose more than eight hours of work.
Prime Minister Scott Morrison announced the increased support after a four-week lockdown extension for Sydney and surrounds was confirmed.
He argued disaster payments were faster, more effective and better targeted than JobKeeper.
"We are not dealing with a pandemic outbreak across the whole country," the prime minister told reporters in Canberra on Wednesday.
"JobKeeper was a great scheme but you don't play last year's grand final this year."
While the expansion is designed to immediately help people in NSW, all Australians will be eligible for the new rates under future lockdowns.
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