New South Wales posted 21,151 COVID-19 infections - an increase of 8,925 cases from Thursday - and six deaths on Friday, but Premier Dominic Perrottet says the state's health system "remains strong".
There are 832 people in hospital - an increase of 85 from Thursday's 746. Sixty-nine people remain in intensive care.
Chief Health Officer Kerry Chant said in a COVID-19 update on Friday it was likely case numbers were actually higher than those reported as there is a lot of transmission in the community.
"If you have the most minimal of symptoms I'm asking you to please stay home, isolate and get a test," Dr Chant said.
Despite the sharp increase in case numbers, Mr Perrottet told reporters the state's health system was in a "very strong position" to handle the COVID-19 infections and hospitalisations.
Members of the public queue in their cars for a COVID-19 PCR test at the St Vincent’s Drive-through Clinic at Bondi Beach in Sydney. Source: AAP
"Whilst the case numbers are substantially increasing, compared to where we were with the Delta variant, our position remains incredibly strong. What is pleasing is that our health system remains strong," he said.
He said he understood many people in the state were anxious about the escalating case numbers.
“But just like the challenges of the last two years, we will get through this challenge as well and come out stronger the other side – and we'll do that because of the effort and the spirit of the people of our state,” he said.
The majority of people in ICU are unvaccinated, and Health Minister Brad Hazzard is urging people yet to get vaccinated to use the new year as an opportunity to change their mind.
"If you've told your mates 'I'm not going to have it because of whatever', well now's the time to say, 'you know what, I'm thinking about it, it's a new year, I'm going to change my ways and get a vaccination,'" he told reporters.
NSW is putting its faith in rapid antigen tests and is awaiting the arrival of 50 million tests that have been ordered.
The rules for international arrivals are also being changed so the thousands of people flying into Sydney daily can obtain a rapid antigen test rather than joining the queue at PCR testing clinics.
What's the news in other states?
Victoria recorded 5,919 cases of COVID-19 and seven fatalities on Friday - a jump from 5,137 infections on Thursday.
Hospitalisations have increased to 428, up from Thursday's 395, and there are 97 patients in ICU.
More than 66,700 tests were processed on Thursday, with sites buckling under the demand and having to close early in the day after reaching capacity.
Health Minister Martin Foley said on Friday the state was not poised for another statewide lockdown, even with the record number of cases and increasing number of people in hospital.
"I'm confident that with the support of the community ... we can stay safe and stay open," he told reporters.
South Australia, meanwhile, has posted a record 2,093 COVID-19 infections and two deaths.
The two deaths, which occurred in aged care facilities, are under investigation, with both people being COVID-positive at the time of their passing.
The surge in infections comes after the state recorded 1,374 new cases on Thursday and the death of a COVID-positive child under the age of two.
Just days after moving to rapid antigen tests for incoming travellers, after originally requiring PCR tests, the state has now ditched test and permit requirements altogether, effective immediately.
Double-vaccinated international travellers will also no longer need to isolate on arrival.
The government has also made the third dose of the COVID-19 vaccine mandatory for workers in hospitals, aged care, and residential disability sectors.
Numbers also sharply jumped in the ACT with 462 new cases, up from Thursday's benchmark of 253 cases.
There are six patients in ACT hospitals with COVID-19, although none require intensive care or a ventilator.
Queensland on Friday reported 3,118 new infections from 35,215 tests, up from the 2,222 new COVID-19 cases recorded in the state on Thursday.
There are 126 people in hospital, an increase of 97 on the 29 patients hospitalised on Thursday.
There is just one patient in the ICU with the Delta variant who is not on a ventilator. The state now has 11,697 active cases.
Chief Health Officer John Gerrard urged people feeling unwell to resist the temptation to party in the new year and instead stay at home - no matter how mild their symptoms.
"If you have any respiratory symptoms, there is a good chance that it's going to be COVID at this point," Dr Gerrard said.
"You should stay at home this new year if you are sick."
Tasmania has posted 137 new cases of COVID-19 in a massive surge in cases - up from 92 infections on Thursday.
One more person has been admitted, with the state now treating four positive cases in hospital.
There are 520 active cases in Tasmania and no-one in ICU.
The Northern Territory's daily COVID-19 case tally has jumped to 60 infections as Omicron starts spreading through the community.
From 6pm on Friday, people will be required to wear face masks in all indoor public areas, putting a dampener on New Year's Eve celebrations for many.
Meanwhile, COVID-19 has caused further Ashes disruption after cricketer Travis Head contracted the virus.
Head will miss the SCG match, beginning on 5 January, after becoming the first Australian cricketer to test positive for COVID-19 while on duty with the Test squad.
The potential for further positive cases among Australia's players, families and support staff looms large with everyone in the touring party undergoing PCR and RAT tests on Friday morning.
With Rayane Tamer and AAP.
