The national cabinet has announced changes to the current coronavirus testing criteria while the deadline to suspend all elective surgery other than the most urgent procedures has been extended until April.
The testing will now include anyone with a fever or acute respiratory infection who works in health care or aged care, lives in areas with an elevated risk of community transmission, or where there are two or more plausibly-linked cases.
The last criterion would take in aged and residential care, rural and remote Aboriginal communities, detention centres, boarding schools, and military bases that have live-in accommodation.
It had been announced earlier that state and federal leaders had agreed to indefinitely suspend all category three and most category two surgeries from midnight.
The national cabinet agreed on Wednesday night that the deadline for the suspension of semi-urgent category two and three elective surgeries at private hospitals would be extended to April 1.
The move to suspend elective surgeries would help free up resources needed by healthcare staff, the prime minister said.
"This will allow the preservation of resources like personal protective equipment and health services to prepare for their role in the COVID-19 outbreak," Scott Morrison said.
Deputy Chief Medical Officer Paul Kelly said decisions on category two surgery would be made by people's clinicians on a case-by-case basis.
"I want to stress, as the prime minister did recently, based on our advice, that urgent surgery, of course, should continue," Professor Kelly told reporters in Canberra.
"So cancer surgery, heart surgery and so forth, which is absolutely needed will continue."
Health Minister Greg Hunt announced the government would be subsidising 1000 nurse refresher courses to help bolster numbers in the health system.
The government will give the Australian College of Nursing $1 million to run online courses, which include training on coronavirus infection control.
Labor's health spokesman Chris Bowen has said the government should consider blocking the upcoming annual price rise to private insurance premiums.
"I recognise this is a complicated issue ... but anything which can take pressure off people at a time when budgets are under enormous pressure should be very much considered," Mr Bowen told reporters in Sydney.
The decision to suspend unnecessary surgeries was quickly welcomed by the Australian Society of Anaesthetists.
"The only way Australian hospitals can effectively prepare for an influx of patients is if we have the time to devote resources to this preparation," president Suzi Nou said.
"We believe that the health system is not yet ready to cope with the likely massive demand for our services."
But Dr Nou said this was just the start and further action with containment measures would be needed.
Category one and two surgeries are classified as urgent and semi-urgent respectively, while category three surgeries are recommended to take place inside a year.
Before the prime minister's announcement, Australian and New Zealand medical colleges warned unnecessary surgeries were soaking up precious resources needed to fight the pandemic.
Meanwhile, the federal health department said there were now 2252 cases of COVID-19, with eight dead, 17 in intensive care and 197 hospitalised.