A sudden surge in coronavirus cases in recent weeks has seen hundreds of thousands of workers benched by illness or the need to isolate, leading states to quickly lower the isolation requirement to seven days.
Prime Minister Scott Morrison had floated a proposal to lower the minimum age of forklift drivers from 18 to 16, seeking solutions for a shortage of workers now hobbling the economy. Earlier this week he scrapped visa fees for foreign backpackers and students wanting to work and study in Australia.
But most States consider forklift operation to be high-risk work which requires a licence available only to 18s and over, and after a meeting with State premiers on Thursday, Morrison said the proposal had proved a non-starter.
"We had a good discussion today and it is not something that we believe, collectively, we should be pursuing at this time," Morrison told a media conference.
The National Cabinet did agree to consider recognising New Zealand licenses for truck drivers to meet a shortage in that sector.
Morrison's Liberal-National coalition government is seeking ways to loosen regulations in Australia's transport and food sectors to ease supply chain and workforce disruptions that have led to empty supermarket shelves.
The problem has been exacerbated by a widespread shortage of rapid antigen tests (RATs), limiting the ability of workers to test themselves, which has become a hot button issue for voters ahead of an election expected by May.
Addressing criticism the government had acted too late on securing RATs, Morrison had on Wednesday promised to procure up to 52 million kits this month and urged state leaders to drop requirements for workers in most industries to take daily tests.
He was upstaged on Thursday by Victoria Premier Dan Andrews, who announced the state had ordered 166 million test kits, on top of 44 million already on the way.
The government is still having to defend its slow start last year to procuring vaccines, blaming a worldwide shortage of shots and the need for the drugs to be properly approved.
Australia's Therapeutic Goods Administration (TGA) on Thursday provisionally approved Novavax Inc's COVID-19 vaccine, and two oral treatments for vulnerable patients.
The country on Thursday reached the grim milestone of 2 million cases since the start of the pandemic, though deaths have been low by international standards at just over 2,900.
The three most populous states of New South Wales, Victoria and Queensland on Thursday reported 69,600 new coronavirus cases and more than 4,800 patients in hospital.
NSW at least did see the first drop in hospitalisations since mid-December, a possible sign the Omicron wave could be peaking in the state.
(Reporting by Wayne Cole; Editing by Kenneth Maxwell)
By Wayne Cole