Deputy premier Paul Toole has not ruled out the possibility of future, isolated lockdowns if cases skyrocket.
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NSW residents were released from strict lockdown on Monday after months of being bound by stay at home orders, with the day being referred to as 'Freedom Day'.
People who have had two doses of a COVID-19 vaccine are now able to go into retail shops, dine out at pubs and restaurants, visit other people's homes, and no longer have to wear masks outdoors.
It was the first step in the the road to recovery for NSW, but Mr Toole has warned that lockdowns may not be entirely a thing of the past.
He said NSW Health will be closely monitoring areas where new cases of community transmission are still being recorded.
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"We'll be keeping a very close eye on the number of cases in local communities, but the cases may not necessarily be the issue to be looking at," he said.
"It will be looking at what the pressure is on the hospital system, it will be looking at the number of people who may be ending up in ICU units, people ending up on ventilators, that'll be the settings that will actually determine whether or not there are localised lockdowns.
"And you may not see an entire area locking down. It might be localised to be a town, a city or even a locality if there are concerns that are presented by NSW Health."
Dubbo reopened on Monday, despite new cases still being announced for the local government area.
As NSW emerges from lockdown, Mr Toole encouraged people to keep coming forward for their first and second doses of the vaccine if they haven't already received them.
"We've had really good rates of people coming forward and getting their first dose of vaccination, second rates are really climbing, but please don't delay your second appointment," he said.
"... If you haven't had it done, please do it. I'd rather you be looking after yourself and those in your community, rather than being sorry for that decision to not be vaccinated."
The three vaccines, AstraZeneca, Moderna and Pfizer, are available at various providers in Dubbo.
People are also encouraged to come forward for testing if they have any symptoms of COVID-19, no matter how mild.
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