The Morrison government has blasted Victoria for putting Australians' jobs at risk by not moving more swiftly to lift restrictions put in place to deal with the coronavirus.
But Victorian Premier Dan Andrews has hit back, accusing Federal Treasurer Josh Frydenberg of putting politics ahead of health.
The stoush threatens to make Friday's national cabinet meeting more politically charged than usual, having not met for the past five weeks.
"More than 1000 jobs are being lost every day on this premier's watch," Mr Frydenberg told reporters in Canberra on Monday.
"The bloody-mindedness is unforgivable. The stubbornness is unforgivable. He's making it up as he goes."
Mr Andrews hit back, saying the state government had to weigh up all the evidence.
"It's all about the politics with this bloke, isn't it? That's all he does. He is not a leader, he is just a Liberal," Mr Andrews said.
Speaking to a business forum, Commonwealth Bank chief Matt Comyn said the country could benefit from Victoria acting more quickly to lift its limits.
"People would certainly find the (slow) relaxing of restrictions and the impact on small business disappointing," he said.
"It's been a huge impact to businesses."
As of Monday morning, Melburnians are able to get a haircut, see an allied health professional, renovate their properties and wash their cars.
But retail and hospitality businesses must wait until November 2 to reopen.
Mr Andrews has indicated further restrictions could be lifted earlier than planned if case numbers remain low.
Victoria recorded four more cases and another death on Monday, taking the national toll to 905.
NSW in the 24 hours to 8pm on Sunday recorded no new locally-acquired cases and four cases in returned travellers in hotel quarantine.
However, the case total came from just under 7000 tests, prompting NSW health authorities to again urge anyone with respiratory symptoms to get tested.
From Friday it will allow up to 30 people to gather outdoors, up from 20, while group bookings of up to 30 can now be made at restaurants and pubs.
The number of guests allowed at weddings from December will be lifted to 300, provided they are seated.
Tasmanian Premier Peter Gutwein is hopeful his state will reopen to NSW residents from early November but will continue to monitor that state's status for the rest of the week.
Mr Gutwein said the situation in NSW was pleasing, but added he needed more time before easing restrictions from November 2.
Queensland recorded no new cases as health officials continue to urge people with symptoms to get tested after virus traces were found in sewage in some Brisbane suburbs and parts of the Sunshine Coast.
Australian Associated Press