New South Wales Premier Dominic Perrottet has successfully convinced national cabinet to back his plan to scrap the mandatory five days of isolation following a positive COVID-19 test.
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The proposal was agreed to at Friday's meeting of first ministers in Canberra, striking down one of the last remaining restrictions put in place by the leaders on health advised during the pandemic.
National cabinet also agreed to the end of the Pandemic Leave Disaster Payment, also on October 14.
Targeted financial support for casual workers in aged care, disability care, aboriginal healthcare and hospital care sectors would continue, reflecting the need to protect the most vulnerable and those in high-risk settings.
Prime Minister Anthony Albanese described the changes as "proportionate".
He released a three-page letter from Chief Medical Officer Paul Kelly detailing advice supporting the decision to end mandatory isolation as "reasonable".
Asked if his advice on mandatory isolation sent a contradictory message with his own warnings the pandemic was not over, Professor Kelly said the emergency response phase of the pandemic was "probably finished", but more waves of the virus would be seen.
Professor Kelly said the peak health advice panel AHPPC would consider advising a return to mandatory isolation periods if the pandemic moved from a low-transmission period to high-transmission.
Mr Perrottet argued there was no other mandatory isolation period for other illnesses, saying he wanted to get to a point where people could get out and enjoy life if they were not sick as a balance between public health, broader health issues like mental health, social wellbeing and economic and financial issues.
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Health experts have been critical of the proposal. Australian Medical Association president Steve Robson said removing isolation periods was "putting the public at risk" and was being pushed by people who were "not scientifically literate".
"If you think the flu is COVID, you're living in fantasy land. COVID is a long-term infectious [disease], we're already seeing a massive effect of long COVID on the workforce and the community. You don't have it with long flu or long cold. It's fantasy," Dr Robson told ABC Breakfast on Friday.
Other countries were already seeing a large increase in COVID cases again, he said.
"It's coming into holiday season when people would be travelling around the world. We think it's a period of significant risk and we're urging caution because we need to protect the health system and we need to protect vulnerable people like those in aged care and people with a disability."
The COVID isolation period was cut from seven days down to five at the national cabinet meeting last month.
However, the UK has already scrapped mandatory isolation period for workers.
The first ministers dined with Mr Albanese at the Lodge on Thursday night, where Mr Perrottet advocated for the complete scrapping of the isolation period.
Hospital pressures and health worker shortages
National cabinet was also presented with advice on addressing pressures on the health and hospital system, agreeing to further discussions on policy options specific to each jurisdiction.
On health care worker shortages and changes to qualification recognition to assist with making up the gap in demand, national cabinet agreed to suite of projects proposed by the Australian Health Practitioner Regulation Authority to streamline and accelerate skills and qualification recognition while maintaining an appropriate level of safety and quality.
An independent rapid review of regulations for Australian and overseas trained health professions will be run to report back to national cabinet in early 2023.
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Mr Albanese thanked the leaders for their cooperative spirit in the discussions.
On Friday morning the leaders were also be briefed by the new National Emergency Management Agency on the risk of floods and storms as La Nina continues into another expected wet summer, and noted preparations being made by relevant agencies.
