There will be no limits on the number of people allowed to gather inside, other than the rule of one person for every four square metres. The national cabinet scrapped an earlier plan to move to a limit of 100 people indoors under stage 3. Instead, the square-metre rule will apply, a decision that clears the way for movies, clubs, restaurants and other events such as large weddings and funerals.

The exception is nightclubs which Mr Morrison said would not reopen any time soon.

The national health advisory group had been asked to do more work on the four-square metre rule, especially for much smaller venues, he said.

The changes happen once states and territories moved to stage 3, expected in July. Most are now at stage 2.

The national cabinet also set a path for international students, saying they would be allowed on a pilot basis for semester 2. The decision is subject to the states and territories submitted plans for quarantine and other safety arrangements, Mr Morrison said. The ACT is set to to take lead, but national cabinet said preconditions included opening state borders and returning to on-campus learning.

States also reopening borders, with Queensland considering a date of July 10, and South Australia announcing July 20.

At a meeting on Friday, the national cabinet agreed that stadiums of up to 40,000 people will be allowed crowds up to one-quarter capacity - which means crowds of up to 10,000.

Mr Morrison said the new rule would apply to festivals and other outdoor events as well as sports, but only where they were ticketed and seated. The changes would happen once states moved to stage 3.

But no decision has been made about stadiums with bigger capacities. Mr Morrison said more work was needed before crowds would be allowed in stadiums that accommodated more than 40,000 people.

"If we're talking about sort of large folk festivals where people sort of roam around from tent to tent, and gathering to gathering, that is not something that is being talked about here," Mr Morrison said.

"It would have to be a large, open area. There would need to be seats at the appropriate distance. It would need to be ticketed, and so people would be able to understand who was in attendance at that event."

The national cabinet has warned Australians to expect more cases but says that will not halt its steps to reopen the economy.

Mr Morrison said the agreed policy was to suppress the virus, not eliminate it.

"We are not going to have our policies trapped by the goal of eradication," he said.

"It's important to note that, there being cases, and there being the odd outbreak here or there, is something that is anticipated and the system has been built to deal with. But the emergence of cases is not something that will necessarily require the three-step process and the opening up of the economy to be halted."

Chief Health Officer Brendan Murphy said of the 38 new cases in the past week, more than half were among people returning from overseas.

"We have effectively achieved elimination at this time in many parts of the country, but that's not our goal, because we know we will have return travellers coming, we know our quarantine arrangements are not going to be 100 per cent perfectly safe all the time," he said.

"We know that there may be small pockets of community transmission of this virus in many parts of the country and they may appear and they will probably appear as we get more and more active and more and more interactions."