There are 2,501 new cases of COVID-19 in NSW and no deaths as the premier resists calls to reinstate mask mandates.
The new cases recorded in the 24 hours until 8pm on Sunday is a drop of 65 cases on the previous day's record high of 2,566.
There are 261 COVID-19 patients in hospital — up from 227 — and 33 people are in ICU — up from 28.
A total of 144,368 tests were carried out and 94.9 per cent of people aged 16 and older have had one dose of a COVID-19 vaccine, while 93.4 per cent of people are fully jabbed.
More than 81 per cent of people in NSW aged 12-15 have had one dose of a vaccine and 78.1 per cent have had both doses.
Face masks 'recommended'
Despite the rising COVID-19 case numbers, NSW Premier Dominic Perrottet said he was confident the state could "open up safely."
"We are taking a balanced and proportionate response that's focused on keeping people safe," Mr Perrottet said.
"There will always be new variants of the virus, the pandemic is not going away, we need to live alongside the virus.
"We will always tailor our response to the circumstances in front of us."
Mr Perrottet said wearing face masks was "recommended", and booster shots "were key" in protecting against COVID-19.
"Vaccination protects and saves lives," he said.
On Monday, Sydney's Daily Telegraph newspaper published an editorial by the NSW premier in which he called for calm as COVID-19 numbers surge.
"Case numbers are bound to rise, just as the modelling predicted, and we are all likely to have a close encounter with COVID," he wrote.
"This is not to be taken lightly.
"The safety of the community is and always will be our top priority, and if the trajectory of an outbreak appears likely to put our health system under excessive pressure, we will change our approach, tailoring it to the circumstances and the evidence," he wrote.
"For now, that is not the case."
Dan Suan, an immunologist at Westmead Hospital, says the new Omicron variant is so contagious urgent action is required.
"Sydney is sleepwalking into a catastrophic disaster in January if we don't do something about it right now," he said in a Facebook post.
However, Mr Perrottet said it is a personal decision.
"It is time to shift the balance back to personal responsibility, because a strong, healthy society is built not on the dictates of government, but on the common pursuit of the common good," he said.
Almost 60,000 booster jabs were administered by NSW health workers last week, up from 15,000 the week before, and NSW Health is aiming to administer double that number this week.
COVID-19 cases in Victoria grow
Overwhelming testing demand has created long queues and forced several sites to shut, as Victoria reported 1,302 new COVID-19 infections and no deaths.
It is the first day the state has not reported a COVID-related death since 16 September, and there are 13,175 active cases in the community.
A total of 406 patients are in hospital, 81 of whom are actively infected with the virus in intensive care and 43 on ventilators.
The seven-day hospitalisation average has risen by seven to 387.
About 4,800 people were vaccinated in state-run hubs on Sunday, while 71,491 tests were processed.
Strong testing demand in the lead-up to Christmas is putting the state's testing system under pressure, with long lines forming on Monday morning.
At least 10 testing sites across Melbourne were temporarily shut at 9am after reaching capacity.
People are seen in a queue at the Russell Street COVID-19 testing clinic in Melbourne, Monday, 20 December, 2021. Source: AAP
Acting Premier James Merlino said opening times at centres had been extended considering the number of people wanting to be tested as they prepared for leave or holiday travel during Christmas week.
"I know that there are particular sites where the wait is long but the average is 45 minutes to an hour or so," Mr Merlino told reporters on Sunday.
"I ask people to be patient. We're expanding and extending it as much as we can."
The state government has increased capacity by about 55 per cent since October, with about 260 sites now in operation across Victoria.
Masks are being recommended in Queensland. Source: AAP
Testing delays as SA virus cases surge
South Australia recorded 105 new coronavirus infections on Monday, the first time case numbers have hit triple figures in the state.
There are currently 406 active cases with 342 being managed in home isolation and 59 in hotel quarantine.
Five people are in hospital but none are in intensive care or on a ventilator.
The spike in cases has also prompted record numbers of people to line up for coronavirus tests, with wait times at some drive-through centres in Adelaide blowing out to several hours.
Masks recommended in Queensland
Queensland has recorded another 59 COVID-19 cases with authorities recommending masks indoors amid concerns about a potential Omicron superspreader event.
The new cases emerged after 13,595 tests in the 24 hours to 6.30am on Monday.
Premier Annastacia Palaszczuk says the rising cases are expected with 197,546 border passes issued for people from interstate COVID-19 hotspots in the last week.
She said it was now time to recommend that people wear face masks in all indoor settings, however masks will not be mandated.
"We strongly recommend that you wear your mask in an indoor setting, so we're not mandating it but I will be wearing my mask when I go in and out of cafes or restaurants, and when you're sitting there you can take your mask off," Ms Palaszczuk told reporters on Monday.
NT eases border restrictions, Tennant Creek in lockdown
The Northern Territory has detected three new COVID-19 infections as quarantine restrictions end for fully vaccinated travellers.
A child from Wuppa Town Camp in Tennant Creek and a man and woman in their 30s from Walkabout Bore, 615km to the south, have tested positive.
It brings the current outbreak to 112 cases with more expected.
The outbreak started when an infected woman illegally entered the NT in late October.
The 21-year-old was fined for lying on her border entry form as the virus spread south from Darwin to Katherine, then to multiple Aboriginal communities.
Police have since launched a fresh investigation into the border breach after an Aboriginal woman died from COVID-19 in early December.
The infected man and woman were in Tennant Creek last week and tested positive at Alice Springs Hospital after travelling there for unrelated treatment.
There are currently 13 patients in the hospital, with one in intensive care.
A lockdown in Tennant Creek has been extended for two days until Wednesday at 5pm.
Ms Manison encouraged people to get vaccinated, saying the rate remained low in the town and surrounding Barkly region.
Ali Curung Indigenous community, 170km south of Tennant Creek, also remains locked down with Ms Manison saying its 44 per cent first dose rate needed to climb before restrictions would ease.
A face mask mandate in Katherine and surrounding areas has been lifted.
It comes as the NT opens its borders to travellers who are fully vaccinated and strips quarantine requirements for arrivals.
ACT cases linked to outbreak hotspots
The majority of new COVID-19 infections in the ACT have been linked to outbreak hotspots including Sydney and Newcastle.
The national capital recorded 13 new infections on Monday.
Health Minister Rachel Stephen-Smith said a large number of cases stemmed from people who tested positive after arriving in Canberra from interstate.
There have been 40 infections linked to the Omicron variant since the new strain emerged.
"The majority of our cases were interstate acquired, rather than being locally acquired, so we still weren't seeing a high level of local community transmission," she told ABC radio.
Steady COVID-19 rise for Tasmania
Tasmania has recorded three new coronavirus infections, taking the island state's number of active cases to 10 since borders reopened last week.
Nine of the cases are being managed at home, while one person is staying at a community management facility.
The three new cases, which were confirmed on Monday morning, include a man in his 30s who arrived in Hobart via Melbourne on Wednesday.
The other two are a male overseas arrival in his 40s who touched down in Hobart on Friday via Melbourne and a man in his 20s who arrived in the Tasmanian capital from Sydney on Friday.
More than 91 per cent of Tasmanians aged over 16 are fully vaccinated.