Australian authorities on Monday lifted a snap three-day lockdown of Perth, but faced pointed questions about how the coronavirus leaked from a quarantine hotel for returning travellers.

Stay-at-home orders for Perth and surrounding areas will expire at midnight Monday, after just two people contracted Covid-19 out of thousands tested in the region.

"It was a circuit breaker we needed to limit community spread and keep our community healthy," Western Australia state premier Mark McGowan said.

The virus reportedly spread from a man who recently returned from his wedding in India to other travellers at a quarantine hotel, including one who then unknowingly infected people in the community after being released from isolation.

The cases have prompted a fresh debate over the effectiveness and fairness of Australia's hotel quarantine system, which is now being copied in several countries around the world.

Australia closed its international borders to most non-citizens in March 2020, with those allowed to travel subject to 14 days in quarantine, a policy that effectively curbed the spread of Covid-19.

But quarantine hotels have been the source of each outbreak in Australia since early in the pandemic, leading to a series of snap lockdowns across the country and ever-tightening travel rules.

Canberra last week reduced the number of flights from virus-hit India, while some are pushing to ramp up already strict limits on international travel for Australian citizens.

McGowan has slammed the quarantine system, saying hotels were "not fit for purpose" and calling on the conservative federal government to find alternative sites away from populated cities.

His demand was backed by the Australian Medical Association's Western Australia branch president Andrew Miller, who described the system as a "human rights catastrophe".

But the federal government has so far resisted calls to take over quarantine -- despite having responsibility for border control -- with Health Minister Greg Hunt saying the system was among "the best in the world".

And other leaders, such as New South Wales Premier Gladys Berejiklian, said "we have to accept" there would be inevitable failures with the system "from time to time".

Australia has recorded less than 30,000 cases and 910 deaths since the pandemic began, with no major outbreaks since last year and most regions enjoying few restrictions.