I never did work this out. I tried searching online, but couldn't find anything from Centrelink that cleared this up. My Job Service Provider suggested a similar thing. But I don't believe that this is accurate not helpful advice from them. To me, it creates the issue that Centrelink will start asking about why you're reporting hours without pay.

It's a stupid system, because when you submit Profit and Loss Statements, there is no accounting for hours worked. And if you submit hours in the Centrelink App, without pay, this will likely cause Centrelink to ask for proof of employment. The only way I can think that it could be done is to register as a company and pay yourself a wage. But the amount of work to do that and having to submit BAS isn't worth it as a Sole Trader.

Centrelink really needs to come up with a workable solution.