Speaking to The Canberra Times, Westpac senior economist Matthew Hassan confirmed the nation's economic recovery from COVID-19 would not resume until a 70 per cent vaccination target is reached later in the year.

The economics division of the nation's second largest banking group assumes current lockdown settings in Greater Sydney and New South Wales would remain in place till September 30, a month longer than the current deadline imposed by the Berejiklian government.

"Our base case has measures in place through to the end of September ... that's what we are basing our forecasts off at the moment," Mr Hassan said.

"Our view is based on vaccination levels, leading us out of restrictions rather than, cases coming back down and we think those will be achieving decent levels in October."

Westpac's assumption is in light of NSW recording two consecutive days of daily cases above 300, which has forced regional areas of the state into lockdown and also Melbourne.

The bank expects an 80 per cent vaccination rate is possible around November and would prevent further lockdowns from occurring.

Base case scenarios about the end of lockdown has coincided with the monthly release of the Westpac-Melbourne Institute consumer sentiment survey, which recorded a 4.4 per cent slump in the wake of lockdowns battering the eastern states.

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The consumer sentiment index dipped from 108.8 to 104.1, but remains above the lows recorded at the beginning of the pandemic.

Treasurer Josh Frydenberg said government assistance is cushioning the blow, however the current shock is not as severe as last year's recession.

"It is an extremely challenging time with many people across the country in lockdown," he said.

"Despite this, the scale of the economic shock as measured in employment, consumer confidence and economic activity has not been as severe as what we saw last year."

Economists at Westpac believe the economy would begin its recovery before the Reserve Bank of Australia has its November board meeting on monetary policy.

The bank also found 76 per cent of respondents have or are going to get vaccinated.

Labor Treasury spokesman Jim Chalmers said confidence in the economy is vital for the rebound and argues the opposition's proposed $300 cash for jabs incentive would have assisted in an economic pickup beyond the lockdown.

"Confidence is key to a strong recovery - if people aren't confident about the next 12 months, they are less likely to invest in their businesses and spend money in their communities," Dr Chalmers said.

"Labor's proposed $300 payments would cost a fraction of the billions of dollars a week that are bleeding from our locked-down economies."

Mr Frydenberg noted more than $2 billion in COVID-19 disaster relief payments have been provided by the federal government and is also jointly funding business support packages with the NSW, Victorian and South Australian state governments.

Mr Hassan flagged the most recent survey did show there are still more optimists than pessimists about how the economy is faring.

"It's still definitely a fluid situation," he said. "The virus situation locally is clearly troubling, but consumers appear reasonably confident that it will come back under control, and that once it does, the economy will see a return to robust growth."

The monthly index did note job confidence had contracted, which Mr Hassan says is a short term shock caused from the disruption.

"We've got a shock because washing the economy and so the labor market will capture those effects," Mr Hassan said.

"Predominantly it will be via hours worked where restrictions [are] affecting the amount of time people can work, but there will likely be some job losses associated with the lockdown."

Westpac anticipates gross domestic product to contract 2.2 per cent for the September quarter and then rebound 3 per cent for the final quarter of 2021.