The Morrison government will on Sunday unveil a $66.4bn stimulus package, including cash payments and a new loan guarantee scheme for small to medium enterprises, and income support for workers and businesses hit by the coronavirus pandemic.

Sunday’s package of measures will bring the total value of the economic stimulus to $189bn, which is equivalent to more than 9% of Australia’s GDP – and the prime minister is expected to telegraph a third stimulus package over the coming months in an effort to cushion the significant economic shock associated with the pandemic.

The new cash payments to be unveiled on Sunday will be open both to businesses with turnovers of $50m or less, and eligible not-for-profit charities.

The $25.2bn measure will give around 720,000 small enterprises cash payments equivalent to the tax employers withhold from their employees salary and wages. Eligible enterprises will get a payment equal to 100% of the amount tax withheld, up to a maximum payment of $100,000, which can be used as a wage subsidy.

The government will also create a new loan guarantee scheme for small and medium enterprises. Under the proposal, the commonwealth will guarantee 50% of an eligible loan through participating banks to firms disrupted by the coronavirus.

The guarantee will support lending worth $40bn to enterprises with turnovers of less than $50m. The loans can be unsecured, and used for working capital, and will have to be granted within six months starting 1 April 2020.

Lenders will not be charged a fee for accessing the guarantee scheme. Loans will be repayment free for six months. The maximum that can be borrowed under the guarantee facility will be $250,000 on terms up to three years.

Sunday’s package will also include additional income support measures for both workers and businesses, building on the first stimulus package, worth $17.6bn.

Australia’s central bank and the government have also agreed to pump $105bn into the financial system to keep credit flowing to businesses on the frontline of the economic shock created by the pandemic.

Last Friday the retail banks also agreed to give small businesses a six-month break from making repayments on their loans under a coronavirus relief package.

Sunday’s second stimulus package, to be unveiled by the prime minister and the treasurer in Canberra ahead of a scaled-back parliamentary sitting to legislate the measures, comes as the number of coronavirus cases in Australia has now exceeded 1,000.

On Saturday, New South Wales confirmed 83 new cases, the largest daily increase for the state so far, with Victoria reporting another 51.

NSW Health has faced significant criticism after allowing thousands of passengers to disembark from the Ruby Princess cruise ship and disperse into the community. Four passengers subsequently positive for Covid-19.

With people continuing to circulate in the community, authorities were forced to amplify social distancing messages. Bondi beach in Sydney was shut on Saturday after a crowd gathered in breach of current bans on non-essential outdoor gatherings of more than 500 people.

The health minister, Greg Hunt, warned Australians to think of people being put at risk by a failure to observe social distancing. “If you are breaking those rules you are putting, not just yourself, but you’re putting other Australians at risk.”

“What happened in Bondi was unacceptable and the local council must take steps to stop that occurring,” he said.

After the bans on mass gatherings of more than 500 people outdoors and 100 people indoors, new limits were set on Friday for smaller indoor gatherings of fewer than 100 people. The government also flagged down locking down neighbourhoods in the event there were clusters of infections.

Ahead of Sunday’s stimulus announcement, Morrison said in a statement the next few months would be a “difficult journey” and things would get worse before they get better.

“There is a lot of pain coming but we’re going to cushion the blow as best we can,” the prime minister said.

“In the event that someone does regrettably lose their job because of the coronavirus it’s very important that business give their workers the confidence that this is just temporary, and that when they reopen their doors and get back to business that they will want to get them back on the payroll as soon as possible”.

Since the pandemic hit, Qantas has stood down without pay 20,000 of its 30,000 workers, Virgin has made staff take leave without pay, Flight Centre has closed 100 stores, and Australian-listed retailers with overseas operations have shut outlets across Europe and North America.

Australia’s border is expected to be closed to overseas visitors for six months or more.

A number of market economists are predicting Australia will endure a recession. Last week, the Reserve Bank governor, Philip Lowe, said the central bank was expecting “a major hit to economic activity and incomes in Australia that will last for a number of months”. He said the official cash rate would remain at emergency levels for “some years”.

The governor warned Australians that job losses would be “significant” as a consequence of the economic shock created by the coronavirus pandemic. “I think we have to steel ourselves for a rise in the unemployment rate,” Lowe said. “I’m hoping it’s a fairly temporary event.”

The treasurer, Josh Frydenberg, said last week the health measures needed to contain the spread of the virus meant unemployment would rise, and rise “substantially”. He declared a recession would be hard to avoid. “This is a massive hit to the Australian economy.”

Ahead of the release of Sunday’s package, Frydenberg said: “These are extraordinary times requiring extraordinary measures but Australians can be reassured that their government is working day and night to protect their health, wellbeing and livelihoods.”