A coronavirus cluster in Adelaide has grown to 17 cases, forcing other states and territories to close their borders to South Australia.
Federal Health Minister Greg Hunt is confident South Australian authorities will bring the outbreak under control.
He has offered to send Australian Defence Force troops and a national incident centre is being set up.
"If more is required, more will be provided," Mr Hunt told the ABC on Monday.
"But these are the sorts of challenges that if we trade or engage with the world, if we bring Australians home, we will face, in a world where there's over half a million cases a day.
"Having these strong testing, tracing and isolation systems are absolutely critical and South Australia - on all the evidence - does have exactly that."
The cluster has already caused major disruptions, with Western Australia making a snap decision to reimpose border restrictions.
It also casts serious doubt over all other states and territories reopening their borders by Christmas as planned.
The Northern Territory, Victoria and Tasmania have all declared South Australia a coronavirus hotspot, triggering strict quarantine requirements, with Queensland expected to follow suit.
Canberra residents are being asked to reconsider all non-urgent travel to South Australia.
But Premier Gladys Berejiklian has confirmed NSW will not close to South Australia and urged other states to have faith in their health systems.
"We need to learn to live with COVID," she told reporters in Sydney.
"You can't open and shut borders and change things overnight every time there's an outbreak."
Prime Minister Scott Morrison said the Adelaide outbreak was a reminder to all Australians.
"Even after a lockdown, even after all of this time, the virus hasn't gone anywhere and it can be activated," he told 3AW radio.
"That's why none of us can be off our game, you've got to stay match fit on this all the time."
Victoria has now gone 17 days without any coronavirus cases or deaths.
But Mr Hunt, who hails from Victoria, is reluctant to give the state government credit for keeping the state in lockdown while bringing a second wave under control.
"We always supported, reluctantly and regretfully, going into lockdown once the contact tracing system wasn't able to cope in Victoria," he said.
"There were some differences about the speed at the end, particularly once they were well below their case level that NSW was able to manage.
"We felt that perhaps we had more confidence in their system than they did on the way out."
He and Mr Morrison are visiting Victoria to announce a new, hi-tech vaccine manufacturing facility being developed in Melbourne.
The government has struck a $1 billion deal with Seqirus, a subsidiary of CSL, to rapidly manufacture vaccines in response to future pandemics.
The pair are also meeting Victorian Premier Daniel Andrews to discuss reopening Melbourne Airport for people returning from overseas.
Australian Associated Press