Katina Curtis, AAP Senior Political Writer
(Australian Associated Press)

More than 800,000 jobs could be lost by the end of June and the unemployment rate more than double as vast swathes of the Australian economy is shut down to cope with the coronavirus pandemic.

Already thousands of Australians are queuing outside Centrelink offices and more than 123,000 logged on to its website on Tuesday morning after major sections of the hospitality industry were shut down.

Pubs, clubs, gyms and cinemas were forced to shut on Monday and restaurants and cafes restricted to takeaway only after people ignored health advice to stay home and distance themselves from others to slow the spread of the virus.

Unions estimate that tens of thousands of restaurant and cafe staff will soon lose their jobs where takeaway alone is not enough to sustain the business.

Already, more than 10,000 retail workers are out of work, mainly in smaller outlets, with more facing the prospect as the recession comes closer.

The tourism industry has already been shattered as international travel dwindled and now all non-essential domestic trips are off too.

Organisations as diverse as Qantas, Virgin, Michael Hill Jewellers, the NRL and AFL, and Tasmanian hospitality giant Federal Group have stood down workers.

Westpac senior economist Bill Evans says the difficulties will only escalate.

He’s upgraded economic forecasts issued just a week ago to now say unemployment will peak at 11 per cent – up from the 5.1 per cent it was in February.

That means an extra 814,000 people out of work over the next three months, tipping the total number of jobless over 1.5 million.

By contrast, during the two years of the global financial crisis, some 207,000 people lost jobs – about a quarter of the impact now being predicted.

Mr. Evans said the strong restrictions that came into force on Monday and the prospect of even tighter rules means the economic impact will be worse than earlier anticipated.

“Economic disruptions are set to be larger as the government moves to address the enormous health challenge which the nation now faces,” he said on Tuesday.

“That challenge is probably best summarised by a potential shortage of ICU beds in coming weeks if we do not significantly slow the rate of infection immediately.”

Arts and entertainment, hospitality and construction are expected to be the worst-hit sectors.

Up to four in 10 people in the entertainment sector and nearly three in 10 working in hospitality are likely to lose their jobs, Mr. Evans predicts.

Conversely, more workers will be needed in healthcare, telecommunications and public administration.

He expects the hit on jobs won’t ease until the final months of the year, when he forecasts the unemployment rate will have ticked back down closer to eight per cent.

The Westpac forecasts are in line with Treasury expectations that a million people not already on welfare will receive the new $550 fortnightly coronavirus supplement.

The government figures include casuals and sole traders who haven’t lost their job but have had hours or income drop off significantly.

Labor frontbencher Bill Shorten described the situation as “diabolical”.

“This is terrible, it is nothing short of terrible,” he told Sky News.

And Government Services Minister Stuart Robert, who is in charge of Centrelink, has conceded the decision to shutter so many businesses “saw hundreds and hundreds of thousands, maybe a million people unemployed overnight”.

“It’s heartbreaking stuff yesterday in terms of decent people finding themselves very quickly in some very difficult circumstances,” he told 2GB radio.