Victorian Premier Daniel Andrews said a rise in community transmission cases has prompted the government to re-impose coronavirus restrictions.
On Sunday the government announced 19 new COVID-19 cases in the state.
Victorian Health Minister Jenny Mikakos said that most of the transmissions were related to family clusters.
"This is a very contagious virus and we are seeing the spread of this virus among extended family members, two grandparents, two grandchildren, children taking us to school," she said.
"This is a really critical moment in terms of how the virus operates in Victoria," Police Minister Lisa Neville said in announcing police would be returning to a stricter level of enforcement.
The state of emergency in Victoria has also been extended until 19 July.
The new case numbers are at the highest level in two months, with 25 new cases announced on Saturday.
From midnight Sunday, the number of household guests will be limited to five.
A covid testing sign is seen at a drive-through COVID-19 pop-up testing clinic in Melbourne. Source: AAP
Outdoor gatherings will be reduced from 20 people to 10 people.
He has also mooted the idea of even tighter restrictions on local government areas that are virus hot-spots.
But mayors and councilors from the areas most affected have urged the government not to impose local-government area-wide lockdowns and instead focus on specific troubled spots.
Mr Andrews said strict lockdowns, including limited travel, like those the whole state faced in recent months, could be imposed in specific local government areas to combat outbreaks.
The council areas with the highest number of new cases are the outer suburban areas of Melbourne - Hume, Brimbank, Casey, Darebin, Moreland and Cardinia.
Darebin Mayor Susan Rennie told The Age newspaper a council wide lockdown is "too crude a measure".
"I don't think it's helpful to consider the whole of Darebin as one unit. We have multiple shopping precincts, if it turns out there is an issue at a particular shopping precinct, let's deal with that precinct. Reservoir is a long way from Fairfield," she said in reference to the two suburbs.
Meanwhile Moreland Mayor Labros Tapinos said that her council was a large area and lockdown the whole council would be difficult to enforce.
The rise was the fourth successive day with double-digit increases in Victoria, up from 13 on Friday, 18 on Thursday and 21 on Wednesday.
Cafes, restaurants and pubs had been set to be allowed 50 patrons at one time from Monday, up from 20 currently.
But that will also be put on hold until 12 July.
'Get the economy open'
Federal minister Keith Pitt says while Victoria's need to reimpose COVID-19 restrictions was a concern, hotspot outbreaks were always going to happen and Australia must focus on rebuilding its economy.
"I think we do need to recognise that it was always going to be the case that there will be localised hotspots and small outbreaks," he told Sky News' Sunday Agenda program.
"If anyone is out there that believes this is completely eliminated in Australia, well I think that's wrong."
"The coronavirus remains very challenging in terms of the health response," Mr Pitt said.
"But we do need to continue to get on with getting our economy open."
As of Saturday, there were nearly 7,440 virus cases confirmed across Australia since the initial outbreak. The death toll remains at 102, relatively low by international standards.
Minister for Resources Keith Pitt. Source: AAP
In contrast, there have been 8.5 million infections around the world with a combined death toll of 450,000.
'Frustrated, disappointed'
Mr Andrews said that since April, half of Victoria's cases were transmitted among families in the same household.
"Since April, half of all of our new cases have come from family-to-family transmission," the premier said.
"I'm frustrated by it. I'm disappointed by it.
"Unless we can break this cycle...then we are going to see more and more of these cases."
The premier said there were instances of people gathering in large numbers during family gatherings, even though they were told to self-isolate.
"We have even had people who had tested positive and have been told to go home and isolate and instead they have gone to work, instead they have gone and visited loved ones in large numbers," he said.
"It is unacceptable that families anywhere in our state can, just because they want this to be over, pretend that it is."
Gyms, cinemas, theatres and TABs, which were set to reopen for the first time, will still be able to do so, with a maximum of 20 people.
The state's Chief Health Officer said Victoria is "absolutely at risk of a second peak" of COVID-19.
"That is what the numbers look like - a doubling every week. We have to drive that down," Professor Brett Sutton said on Saturday.
"We are absolutely at risk of a second peak - but we must get on top of it."
The premier said a new "hardship" payment of $1,500 would be made available to those who need to stay away from work if unwell - to prevent them from going to work with coronavirus.
"This is about making sure there's no financial reason for these people not to isolate," he said.
Mr Andrews affirmed that people who can work from home continue to do so at least until 31 July.
"If you do have people on the job, [we must have] a zero-tolerance approach to sickness. Having symptoms must mean you go home, and you get tested," he said.
SA to keep Victorian border closed
The South Australian government has warned it will keep its borders closed to Victoria if opening them jeopardised the health of SA residents.
"We will not open our borders to Victoria unless it is safe to do so," Health Minister Stephen Wade said.
"Our number one priority is the health of South Australians."
Mr Wade said authorities indicated they were concerned about Victoria's cases last week and will closely monitor the situation.
"We need to accept the fact restrictions may need to be put in place depending on circumstances as they evolve.
"We haven't seen any sign of increasing community transmission in any other states or territories."
South Australia opened its border to Queensland on Friday, allowing those travellers to enter the state without mandatory 14 days in quarantine.
It followed an earlier move to lift restrictions on people coming from Western Australia, Tasmania and the Northern Territory.
All state border restrictions are scheduled to be lifted in SA on 20 July.
Mr Andrews said he would be speaking to NSW premier Gladys Berejiklian about whether there should be travel restrictions imposed on Victorians who live in parts of the state identified as coronavirus hotspots, but he confirmed he was not proposing border closures at this stage.
The premier said he had discussed this strategy with Prime Minister Scott Morrison and that it was a method discussed by the national cabinet.
Victoria's restrictions from midnight on Sunday:
- Maximum five visitors to a home
- Gatherings of maximum 10 people outside the home
- Maximum 20 people to a space in restaurants, cafes, pubs
- Maximum 20 people to a space at community halls, libraries, museums, galleries, historic sites, zoos
- Maximum 20 seated patrons at bars, clubs, strip clubs, nightclubs for alcohol and/or meals
- Contact sports training and competitions for people under 18
- Non-contact sport for all ages
- Ski season and accommodation facilities to open with screening and safeguards
- Maximum 20 people to a space at indoor cinemas, theatres, concert venues
- Maximum 20 people for small religious ceremonies, plus people required to conduct ceremony
- Maximum 20 people to a space at auction houses houses, real estate auctions
- and open house inspections, plus those required to facilitate
- Camping and shared facilities at tourist accommodation allowed
- School camps resume
- Maximum 20 people to a space at indoor sports centres and physical recreation venues, gyms, change rooms open
- Maximum 20 to a space at play centres
- Changing rooms and showers open in swimming pools and no lane limits
- Pub TABs and retail TABs to open
People in Australia must stay at least 1.5 metres away from others. Check your state’s restrictions on gathering limits.
Testing for coronavirus is now widely available across Australia. If you are experiencing cold or flu symptoms, arrange a test by calling your doctor or contact the Coronavirus Health Information Hotline on 1800 020 080.
The federal government's coronavirus tracing app COVIDSafe is available for download from your phone's app store.
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