The prime minister says mental health considerations have been a key factor in decisions by health officials to not institute broad mask mandates.
As case numbers continue to rise due to more infectious strains of COVID, calls have been growing for greater mask use in public areas.
While mask use indoors has been encouraged, mandates have not be put in place.
Anthony Albanese said mental health has been one of the reasons for why broad mask mandates haven't been reintroduced.
"There are two things at play. One is mental health considerations ... the imposition of controls on people's behaviours has an impact of people's health, that's just a reality," he told The Project on Wednesday.
"Particularly young people, we're seeing an increasing problematic increase in incidents of severe consequence when it comes to young people's health."
The prime minister said the large take up of COVID vaccinations, as well as anti-viral treatments, were the second factor in the health advice.
"The big difference between now and say a year or 18 months ago, is the level of vaccinations which are out there, that is making an enormous difference," he said.
"Whilst the numbers of people who are getting infected by COVID are expected to peak in coming weeks and then go down towards September ... the consequences are less, because if you are vaccinated, you have a level of protection which is there."
While mask mandates have been put in place in some high-risk settings, such as public transport in certain jurisdictions, Mr Albanese said in many cases people weren't wearing masks in those locations.
It comes as chief medical officer Paul Kelly said businesses should look at working-from-home plans for employees in a bid to stem the rise in infections.
Earlier on Wednesday, Mr Albanese said many businesses had already adjusted to working-from-home models as a result of the pandemic, although it may not always be the case for some sectors.
"For many businesses, it works for both the business and the employee to have more people working from home, of course, we need to recognise there's a consequence as well," he said.
The latest vaccination figures revealed almost 100,000 people received a fourth COVID vaccine dose in the past day.
Almost one-third of the eligible population over age 30 have received a fourth dose, with 63.7 per cent of Australians over 65 having had their second booster.
There were more than 53,000 new virus cases reported on Wednesday, along with 90 deaths.
LATEST 24-HOUR COVID-19 DATA:
NSW: 15,352 cases, 20 deaths, 2236 in hospital with 63 in ICU
Victoria: 12,984 cases, 28 deaths, 906 in hospital with 45 in ICU
Tasmania:1586 cases, three deaths (one occurred in April and has only just been confirmed) with 49 in hospital and two in ICU
Queensland: 9650 cases, 15 deaths, 1034 in hospital and 21 in ICU
SA: 4774 cases, 22 deaths (from May 3 to July 18), 323 in hospital with 11 in ICU
WA: 7901 cases, two deaths, 457 in hospital with 22 in ICU
NT: 642 cases, 68 in hospital with one in ICU
ACT: 961 cases, no deaths, 160 in hospital with four in ICU