Restaurants, bars, pubs and other venues are now being forced to comply with an indoor limit of one person for every four square metres.
The rule will drastically limit the number of people allowed in cafes, restaurants and pubs. But they can stay open for now.
"If you've got a room, if you've got a premise, if you've got a meeting room or something like that, that's 100 square metres, then you can have 25 people in that room," Prime Minister Scott Morrison said on Friday.
"In addition to that, you should continue to practise wherever possible the 1 metre or 1.5 metre of healthy distance between each of us."
Landlords will also be asked to share the pain, with the states now putting together new rules to ensure tenants aren't evicted when they can't pay their rent.
Mr Morrison said Western Australia and NSW were developing model legislation for all jurisdictions. The new rules would set a trigger for when tenants - both businesses and residential - needed rent relief and would apply over the coming six months at least, he said.
"I know that will mean something for landlords, just as the decision taken today means something for banks, just like the decisions we have already taken as a Commonwealth government means things for our balance sheets," he said.
The federal government announced that it would delay its federal budget by five months with all states to follow suit. This will require legislation when parliament sits next week to guarantee supply and funding for government programs, but it is unclear just how it will work given Labor will be reluctant to give the government the green light to spend without scrutiny.
The budget was to be brought down on May 12, but Mr Morrison said now was not the time to prepare a budget.
"Putting budgets together at this time, with the great uncertainty that exists, is not something that any Commonwealth or state government should be doing," Mr Morrison said.
"As a result, we have already decided that we will not be now handing down a Budget until the first Tuesday in October, on October 6. All other states and territories will be working to similar timetables, a decision set to complicate the ACT budget given the election is set for October 17.
Cases surged again on Friday, from 565 on Thursday morning to 709 on Friday morning, with 46 more on top of that announced by NSW.
Mr Morrison also hinted at more restrictions and advice covering travel in Australia during the school holidays, saying people should reconsider non-essential travel. More would be announced after a meeting on Tuesday next week, he said.
And he foreshadowed plans to close off Indigenous communities, preventing people from arriving or leaving other than for essential services, to stop the virus getting near vulnerable groups.
Chief Medical Officer Brendan Murphy pleaded with Australians not to go out with "a sniffle or a cold".
"This is critical now. We have to slow the curve," he said. "... There is a risk that if we don't do what every one of us has to do as our civic duty to control this spread, it will grow significantly greater."
It was now crucial for people to stay away from each other, he said.
"You should be distancing yourself from every fellow Australian where possible. That's why we have guidelines for people in gatherings of less than 100. It's no point having a gathering of 20 people if it's in a tiny room and you're all together.
"You've got to practise social distancing. Keep that metre-and-a-half away from each other, practise good hand hygiene all the time, and stay away from work or the community if you are unwell. This is also incredibly important," he said.
"Nobody should be going to work or mixing with society or friends, or going out if they are unwell at all."
Professor Murphy also referred to reports of people flouting the 14-day quarantine rules after coming back from overseas.
"This issue of quarantining when you come home is serious. This is not an advisory. This is your civic duty to your fellow Australians to stay home for that entire 14 days, if you've come back to Australia. No exceptions.
"And if you see anyone who is not abiding by that, a recent traveller, make sure they do because we are really serious about that. It has such a big impact on our outbreaks in the last few days."
Mr Morrison said the government was "looking actively at relaxing the testing criteria", but he did not give details. The government has to date restricted testing to people with symptoms who have come from overseas or been in contact with a known case, as well as health workers. But it has earned significant criticism from doctors unable to test patients with symptoms and experts who point to the success of mass testing regimes overseas.
Mr Morrison said Australia was now testing all aged care workers and would be testing healthcare workers with flu-like illnesses and everyone arriving in hospital with pneumonia.
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