Australia's federal government has warned state leaders that current emergency economic supports may be withdrawn when the country hits a 70-80 per cent Covid-19 vaccination rate, even if individual states and territories decide to retain border controls.

Treasurer Josh Frydenberg has urged states and territories to stick to a four-stage national reopening plan agreed last month, as some have suggested delays given persistently high new daily case numbers in Sydney.

"I wouldn't use the term sanctions ... but there should be no expectation on behalf of premiers and chief ministers that our emergency economic support will continue at the scale that it is currently when we reach the 70-80pc targets," Frydenberg told broadcaster Seven News.

Australia, grappling to control a third wave of the coronavirus, has locked down more than half of its 25 million population in its largest cities, Sydney and Melbourne, and capital Canberra while also racing to vaccinate millions.

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