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There were 11 cases of community transmission in NSW on Wednesday, with the state government pumping the brakes on easing restrictions further.
Just four of Victoria's seven new infections were in Melbourne, while five more deaths took the national toll to 904.
The remaining three new cases were in regional areas with Shepparton in the state's north undergoing a testing blitz.
Senior Morrison government ministers ramped up pressure on Victorian Premier Daniel Andrews to ease clamps from October 18.
Federal Health Minister Greg Hunt said Melbourne's two-week rolling average of 9.6 cases was below the Commonwealth's definition of a hotspot.
"The simple way forward is the national standard of a rolling average of less than 10 cases and they are there," he told reporters in Canberra on Wednesday.
There has been a 15 per cent increase in people seeking psychological support since March and a 31 per cent spike in Victoria over the past four weeks.
Treasurer Josh Frydenberg appealed to Mr Andrews to lift restrictions from this Sunday.
"Please understand the impact that the lockdown and these harsh restrictions are having on people's mental health," he told reporters in Sydney.
"Please give the people of Victoria their freedom back this weekend."
Mr Andrews acknowledged the costs of keeping the state's capital in lockdown for too long could eventually outweigh health benefits.
"Weighing up those matters is very, very challenging but there is an enormous amount of thought, consideration and judgment that comes with that task," he told reporters in Melbourne.
There are no people in Australia on ventilators, while just one coronavirus patient is in intensive care with 28 in hospital.
"That's an immensely important national achievement," Mr Hunt said.
Meanwhile, Prime Minister Scott Morrison sounded a more conciliatory tone on Queensland's border closures while on the state election campaign trail.
Mr Morrison said border closures were severe for tourism but conceded travel restrictions "played a role" during Victoria's deadly second coronavirus wave.
"Protecting health does come at a cost," he told Queensland radio 4RO.
The first tourist flights from New Zealand are set to arrive in NSW and the Northern Territory from Friday.
The prime minister said if Queensland also exempted Kiwis from mandatory hotel quarantine, the state could be included in the one-way travel arrangements.
He said New Zealand and NSW tourists could provide a boon for the ailing sector but stopped short of demanding borders reopen.