While Dr. John Gerrard, Queensland's Chief Health Officer, said to expect a rise in cases over the next few days.

"It won't be a surprise at all even if the next couple of days, we see a significant increase in cases as more samples are tested and more people come forward," Gerrard said. "We're going to be seeing very large numbers of cases even though the severity is clearly going to be less."

Newly diagnosed cases in New South Wales, the most populous state, dropped to 18,278 from 22,577 the day before as the number of tests conducted on New Year's Day dropped by a quarter, health department figures showed. But hospitalisations, which authorities have signalled is a figure they are more closely monitoring than total case numbers as they shift towards living with the virus, jumped by 18% to 1,066.

In Victoria, daily case numbers remained above 7,000 and Queensland reported a record 3,587 new cases.

All Australian states, except for Western Australia, have begun to live with the virus as vaccination levels have risen, and the easing in restrictions has pushed cases higher. There were five deaths reported in New South Wales and Victoria, bringing the national death toll throughout the pandemic to almost 2,260 people.