The prime minister emphasised the need to balance economic considerations with health considerations in dealing with the virus.
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"We have got to keep managing this twin challenge of a health pandemic and a Covid-recession," Scott Morrison said.
"But I'll tell you this, we are doing much better than most other developed countries in the world."
He said the need was to "keep Australia open".
And he praised the way New South Wales had dealt with its outbreaks. He called the state "the gold standard".
Mr Morrison opened his press conference by talking of hope; hope he derived from the improving numbers of new COVID-19 cases in Victoria and New South Wales.
NSW recorded only one new case today and Victoria recorded 179 new cases, the lowest in five weeks.
"As we met for this national cabinet meeting, we could say that it was in an environment of increased hope."
He said the federal government would invest an extra $171 million in emergency response centres for aged care.
"With unemployment expected to be over seven per cent in the next two years, jobs is the issue."
He said there needed to be clearer definition of what constitutes a Covid-19 hot-spot "so people know whether they are living in one or not".
He said there must be a balance between the economic costs of disruption against the health benefits.
Borders and barriers were not a substitute for testing and tracing cases and containing cases, he said.
Mr Morrison said he had confidence in Aged Care Minister Richard Colbeck who had accepted failings in handling the crisis.
"We haven't got everything perfectly right ... we continue to learn from the experiences of previous events," the minister had said earlier.
Mr Morrison said it was a challenging area.
The prime minister put the ball firmly in the states' and territories' court over decisions on borders. It's for them to decide.
Mr Morrison said the government was not currently looking at lifting the cap on international arrivals.
"We will be reviewing those caps every fortnight, we will review them again a fortnight from now. Once the Victorian situation, and the NSW situation I think, are even better than they are now, then we could have a look at those caps.
"But right now on the balance of risks I think we need to keep the caps where they are."