Victoria has recorded 317 new coronavirus cases overnight, the biggest increase since the pandemic began, and another two men in their 80s have died from the virus.
Twenty-eight new cases are connected to contained outbreaks and 289 cases are under investigation.
In announcing the figures, Premier Daniel Andrews said it was too early to consider stage four restrictions.
"We're seeing relative stability to these numbers," he said. "We have made the point with these stay-at-home restrictions only a week old, it will take some time to bring stability to the numbers and to start to see a pattern where they are driven down."
He said the best way to deal with the crisis was to have settings in place that were "proportionate to the challenge you face".
The update takes the number of active cases in Victoria to 2128, with 109 people in hospital, 29 of whom were in intensive care.
Chief health officer Brett Sutton said the state may not have hit its peak.
"It's a big number. It needs to turn around. In some ways, I expected it to turn around this week. But as I always said, it's no guarantee. It's upon all of us to be able to turn this number around.
"The restrictions, the stage three restrictions have been in place for over a week, with an average incubation period of five or six days, plus the time for notification to get the numbers in, we would really expect a plateauing in the next couple of days.
"But we cannot be complacent and expect that's going to happen automatically."
Victorian Health Minister Jenny Mikakos said all category three elective surgeries would be paused across Melbourne's public hospitals.
Public hospitals will drop their elective surgery capacity to 50 percent to free up space, and private hospitals will drop to 75 percent.
Public hospitals had been due to return to 100 percent of normal activity by the end of the month, Mikakos said.
The most urgent surgeries would continue as normal.
Increase in unemployment
Official numbers from Australia's Bureau of Statistics estimate unemployment rose from 7.1 to 7.4 percent in June, despite the addition of nearly 211,000 jobs.
The reason that unemployment rose despite the creation, or reinstatement, of so many jobs was that even more people ventured back out to look for work.
"The easing of Covid-19 restrictions in June saw an extra 280,000 people in the labour force, with more people in employment, and more actively looking and available for work," said Bjorn Jarvis from the ABS.
The jobs market also remains underwritten by the federal government's assistance programmes, with Treasurer Josh Frydenberg saying earlier this week that unemployment would be more like 13.3 percent without JobKeeper and other measures.
However, more of the people being kept in employment by JobKeeper are actually doing work, with a 4 percent jump on hours worked in June.
Jarvis said that, overall, about a quarter of the fall in employment between March to May had been regained in June.