Transport workers, teachers and food supply staff will be able to return to work even if they were deemed a close contact, under new isolation changes agreed to by national cabinet.
Prime Minister Scott Morrison and state and territory leaders agreed on Thursday to expand the definition of essential workers, in order to address crippling supply issues across the country.
It comes as the prime minister also flagged changes to COVID-19 surveillance testing and mask wearing could be announced next week.
Thursday's national cabinet meeting agreed to expand the definition of essential workers to include transport, logistics, service station staff, emergency services, correctional workers, energy, water and waste workers.
Food distribution workers, telecommunication, broadcasting, media, education and childcare employees will also be classified as essential staff under the plan.
Isolation rules have eased for essential staff, with employees able to return to work even if they are deemed to be a COVID-19 close contact, provided they test negative to a rapid antigen test.
National cabinet also allowed for international students to work more than the current limit of 20 hours a fortnight, in a bid to ease supply-chain issues.
Spiralling numbers of Omicron cases have placed large swathes of workers out of action due to them either contracting COVID-19 or being deemed a close contact.
The prime minister said the situation was a delicate balance of keeping people at work while also protecting the health system.
"We know what we have to ... keep our hospitals going, keeping our health system strong and keeping as many people at work," Mr Morrison told reporters in Canberra.
"The less restrictions you put on people to get them to work, the more pressure that could potentially put on your hospital system."
National cabinet also agreed on a start date for when free rapid antigen tests would be made available for concession card holders.
From January 24, concession holders will be able to access 10 free tests from pharmacies during a three-month period, with no more than five per month.
National cabinet also discussed possible changes to COVID surveillance testing measures and rapid tests, along with the use of masks.
Details on COVID measures for schools such as regular testing of teachers will be announced next week.
"Parents and teachers and those working in schools, teachers aides and so on, will be well aware of what the arrangements are before school goes back," Mr Morrison said.
Treasury officials told national cabinet that up to 10 per cent of the workforce could be absent from their job due to the virus, rising to as high as 15 per cent if schools were unable to open.
Unions have slammed the government for not allowing free rapid tests for essential workers, with shortages of the tests being reported across the country.
Australian Council of Trade Unions secretary Sally McManus said the government's plan had failed essential supply chains.
"Essential workers are being forced to put themselves in harm's way to keep food on the shelves, medicines in stock, the lights and water on and keep this country open for business," she said.
There were 346,000 vaccine doses administered on Wednesday, nearly a one-day record.
Since the start of the rollout for five to 11-year-olds began on Monday, 142,000 children, 6.2 per cent of the cohort, have received their first dose.
More than 92,264 new infections have been reported in NSW after residents rushed to post positive results from rapid antigen tests since January 1.
The dramatic rise in case numbers comes on top of another grim milestone as the state reported a record 22 lives lost in the 24 hours to 8pm on Wednesday.
There were 37,169 new cases and 25 deaths in Victoria.
Queensland posted almost 15,000 new cases, while there were 3669 cases in South Australia, 1020 in the ACT - excluding rapid tests - 550 in the NT and 1100 in Tasmania.
Australian Associated Press