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NSW has recorded 818 new COVID-19 cases in the 24 hours to Sunday night, dropping below the infection peak set over the weekend.
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Premier Gladys Berejiklian said at least 42 of those people were infectious in the community and three people had died.
NSW saw its all-time peak of 830 new COVID-19 cases in the 24 hours to 8pm Saturday.
"We're all going through the roller coaster ride of emotions as case numbers go up and down and I don't want us to focus so much on the case numbers," Ms Berejiklian said.
"We absolutely want to see the case numbers go down, no doubt about that, and we are working so hard together to make that possible, but the number we need to focus on is the vaccination rate.
"Once we hit 70 per cent double dose, we will be able to live life more freely and once we get to 80 per cent double dose, we will have essentially normalised how we treat COVID."
NSW's total vaccine doses has risen to more than 5.951 million.
Ms Berejiklian said the government would release more information this week on its plan for when students can physically return to school.
Murrumbidgee Local Health District saw its first potential case linked to the Delta variant outbreak after A female resident of Lachlan Shire visited locations in Lake Cargelligo and Hillston while infectious on Monday, August 16.
The MLHD has praised the community's vigilance after more than 550 people came forward for COVID-19 tested at Hillston and Lake Cargelligo over the weekend.
In the 24 hours to 8pm on Sunday, a man in his 80s from south-west Sydney died at Liverpool Hospital, where he acquired his infection. His is the 11th death linked to an outbreak at the hospital's geriatric ward.
A man in his 80s from Newcastle died at John Hunter Hospital, having acquired his infection at the RFBI Hawkins Masonic Village in Edgeworth. This is the second death linked to an outbreak at this aged care facility.
A woman in her 80s from south-west Sydney died at Campbelltown Hospital.
The total number of vaccines administered in NSW is now 5,951,886, with 2,158,951 doses administered by NSW Health to 8pm last night and 3,792,935 administered by the GP network and other providers to 11:59pm on Saturday 21 August 2021.
Of the 818 locally acquired cases reported to 8pm last night, 350 are from Western Sydney Local Health District (LHD), 237 are from South Western Sydney LHD, 74 are from Sydney LHD, 56 are from Nepean Blue Mountains LHD, 35 are from South Eastern Sydney LHD, 24 are from Western NSW LHD, 19 are from Northern Sydney LHD, three are from Far West LHD, two are from Hunter New England LHD, two are from Central Coast LHD, two are from Illawarra Shoalhaven LHD, and 14 cases are yet to be assigned to an LHD.
Deputy Premier John Barilaro said the West and Far West NSW remained areas of concern and there had been 15 new cases identified around Wilcannia and Broken HIll in the hours after 8pm on Sunday night.
"If you have travelled to Wilcannia or Broken Hill in the past days, even if you are showing no symptoms, please come forward and get tested."
"It is very important we get in front of this, and testing gives us the opportunity to make sure we know what is happening," he said.
Mr Barilaro denied that the government's response in far west NSW was a "mess" after reports that COVID-19 rest results were delayed after a contractor reportedly refused to transport samples to a lab as they did not work on the weekend.
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