Cabinet has decided to keep the few remaining Covid-19 restrictions for at least the next two months.
Most pandemic rules have been scrapped, but people still have to self-isolate for seven days if they test positive, and masks must be worn in hospitals in some circumstances.
Health Minister Ayesha Verall said expert advice to Cabinet was that it was not yet safe to shorten the isolation period.
At the post-Cabinet conference on Tuesday afternoon, Prime Minister Chris Hipkins said pressure on the health system was another factor when considering how to cope with Covid-19.
"We've had to weigh a number of things quite carefully. At the moment, the isolation period serves not just to relieve pressure on the health system and results in fewer people being infected, but actually there is a labour market incentive for this as well," Hipkins said.
"People with Covid-19 going to work potentially infect more people and more people end up being off work sick as well."
This was seen in the education system last year, with many teachers infected and off work, with some schools then not able to offer the normal number of classes, he said.
He expected that at some point the mandatory isolation period would be done away with, and had asked for further advice about testing so people may not need to isolate for the full period before returning to work.
Whether New Zealand was an outlier in its phase of the pandemic, compared to other countries, was something that was considered, he said.
"I don't have the exact list in front of me at the moment but certainly we are heading towards a point where Covid-19 will become normal. I would expect certainly at the latest by the end of the winter we'll be into that zone.
"We are kind of moving to that era where Covid-19 will just be another one of those things that the health system manages."
The government had a "whole programme of work" around increasing the capacity of the health system including on bolstering the workforce, he said, but every health system around the world had been struggling with Covid-19, which was still one of the major causes of admission.
Microbiologist Dr Siouxsie Wiles said she was relieved the current settings would remain, because they were "important public health measures", which not only protected lives but also the health system.
"While some people will argue this puts us more out of step with other countries, it is worth remembering that if we had followed those countries at the beginning of the pandemic, thousands more of our friends, families, and colleagues would have died and thousands more would be out of the workforce due to long Covid."
How would infection numbers be affected if isolation was scrapped?
Researchers at Covid-19 Modelling Aotearoa said ending the mandatory isolation period could cause up to 25 percent increase in hospitalisations and deaths within six months.
After four to six months, infections settle to a level that's only slightly higher than if mandatory isolation was kept, but the additional infections were more likely to be in the vulnerable older population, according to the group's modelling.
Programme co-leaders Dr Emily Harvey and Dr Dion O'Neale* said isolation had been a vital measure in the effort to limit the spread of the disease, but the increase in infections if not mandated was not clear because it also depended on people's behaviours.
But if we were to have high uptake of the new bivalent Covid-19 boosters, it would help reduce the impact over the winter period, Harvey said.
"Although the modelling did not include consideration of the new bivalent boosters, we know these new boosters provide some protection against transmission and work well to restore protection against hospitalisation and death that will have waned since the last infection or vaccination."
An approach to only provide guidance on isolation, in particular if support systems were removed, would risk an inequitable situation, which "may push the burden of disease onto more vulnerable groups through increased transmission in their schools and workplaces", O'Neale said.
Instead, O'Neale suggested test-to-release criteria as a solution to avoid risks of increased transmission and excess isolation.
"Test-to-release criteria are also useful for reducing transmission from people who might still be infectious even though their symptoms have reduced sufficiently for them to feel that they are able to return to work, or school."
If isolation requirements were removed, then schools and businesses would be required to develop their own rules and practices to keep people safe, Harvey said.
"Improving transmission reduction measures such as ventilation and filtration in businesses and schools, and widening sick leave eligibility and entitlements would help reduce the impact of all respiratory illnesses over winter."
*Dr Emily Harvey and Dr Dion O'Neale's employer receives funding from the DPMC to provide modelling and analysis to government officials on Aotearoa's Covid-19 response, and from the NZ Health Research Council for a project on modelling and equity for Covid-19 in Aotearoa.