Victoria recorded 33 new cases on Thursday, sparking a testing blitz across 10 hotspot suburbs.
However, the state is reviewing its call for more than 1000 military personnel to help deal with the outbreak, which Premier Daniel Andrews has described as a public health bushfire.
AAP understands plans to have 850 ADF members involved in hotel quarantine are being revised.
“Our top priority is on planning and logistics assistance, and medical personnel to support our suburban testing blitz,” a Victorian government spokeswoman said.
Morrison said Australia is well-equipped to deal with infection spikes and it should not stop moves to reopen the economy on health advice.
“There are a few challenges in Melbourne at the moment but as we said, there will be outbreaks,” he said on Thursday.
“We can’t flick the light on and off and on and off.”
The prime minister said the the nation was adjusting to living alongside the disease.
“We are dealing with the coronavirus, the COVID-19, better than almost any country in the world and that’s got to give us confidence to be able to move ahead,” Morrison said.
Thursday’s figure is the highest daily number of new cases in Victoria since the surge started last week. The state’s active cases have trebled in the past eight days while the rest of the country remains stable.
State premiers and ministers have ramped up calls for Victorians to avoid interstate travel.
Morrison called for national unity, pointing to contact tracers and other health authorities being sent to Victoria from other states.
Deputy Prime Minister Michael McCormack said people in Melbourne breaking public health rules were putting jobs at risk.
“For those people in the northern suburbs of Melbourne, in those potential hotspots, they need to stay at home,” he said.
Australia’s national death toll has been revised up to 104 after NSW authorities added an 85-year-old man who died at a nursing home in April to the tally.
Economic shockwaves continue to reverberate across the nation, with Qantas announcing 6000 workers would lose their jobs and a further 15,000 would continue to be stood down.
The job losses overshadowed the federal government’s $250 million arts package designed to help touring artists, actors and producers of the stage and screen.
“These are very hard days. Our strength and our togetherness is tested on almost a daily basis,” Morrison said.
“Australians continue to prove themselves strong, but we’re going to really need to call on that strength in the coming months ahead.”
The International Monetary Fund has released an improved forecast for Australia, with the economy now predicted to shrink by 4.5 percent this year before registering four percent growth in 2021.
Labor frontbencher Tony Burke said while the IMF report showed Australia was doing better than many other countries, it also warned against the government withdrawing support too quickly.
By Matt Coughlan