The federal government is considering deporting some of the people who participated in a large party in Sydney's eastern suburbs on Christmas Day.
Immigration Minister Alex Hawke was "shocked at the scenes" at Bronte Beach when a crowd breached social distancing and other rules imposed due to a virus outbreak in Sydney's north.
Some are believed to be backpackers who remained in Australia during the coronavirus pandemic or expatriates mostly from the UK.
"Under the Migration Act, if someone is threatening public safety or health their visa can be cancelled or revoked," the minister told Sydney Radio 2GB on Tuesday.
"The federal government is looking at that issue."
As well, the Department of Home Affairs will work with NSW authorities in the lead up to New Year to make sure people do the right thing.
"We're very happy to deport people if people are flagrantly disobeying public health orders," Mr Hawke said.
Meanwhile, Labor has warned the government not to go ahead with cuts to welfare benefits in January, saying it's too soon and the jobs market is still weak in the wake of the coronavirus pandemic.
The Morrison government will lower the JobSeeker unemployment supplement by $100 a fortnight on January 1 and the JobKeeper payment by $200 on January 4.
The new rates will be $150 a fortnight for JobSeeker and $1000 for JobKeeper and are effective until the end of March.
"The government should reconsider it," Labor MP Bill Shorten told Nine's Today Show on Tuesday.
"We are not out of the woods yet with this pandemic and the economic effects, they reverberating around the economy, especially in regional towns and suburbs where there is a lot of casual workers.
"For the less well off, we shouldn't be cutting their circumstances at this point in time."
Mr Shorten noted there are more than one million people on the unemployment queue and that number is likely to increase.
NSW is still trying to suppress a COVID-19 outbreak in Sydney's northern breaches, which has now grown to a cluster of 126 cases.
Premier Gladys Berejiklian says the area will remain in lockdown into the new year after four new local virus cases were confirmed on Monday. A fifth is still under investigation.
A plan to give frontline coronavirus workers from around NSW prime seats to the famous New Year's Eve fireworks on Sydney Harbour has also been cancelled.
"It's too much of a health risk having people from the regions and from Sydney and from broader regional areas congregate all in the CBD," Ms Berejiklian said.
Victoria on Monday recorded its 59th consecutive day without a locally-acquired COVID-19 case but uncovered two new cases in hotel quarantine.
Queensland, which has gone 104 days without any community transmission, recorded five new cases in hotel quarantine on Monday. There are currently 13 active cases in the state.
South Australia on Monday recorded one COVID-19 case in hotel quarantine, while Western Australia recorded three COVID-19 cases in hotel quarantine.
Australia's death toll from coronavirus is now 909, after a NSW man in his 70s who was infected with COVID-19 in March recently died of respiratory complications.
Australian Associated Press