As it happened: Victoria records 12 COVID-19 cases as Daniel Andrews flags further easing of restrictions; SA border opens to NSW as Australian death toll jumps to 861

But when the call for Ms Mikakos to quit came from the Health Workers Union (HWU) and its leader Diana Asmar, it was not treated anywhere near as seriously within the Andrews government.

Ms Asmar in her letter to Premier Daniel Andrews accused Ms Mikakos of “breathtaking incompetence” and described the union’s relationship with the government as “officially dead”.

In recent years the HWU, which claims about 14,000 members, has been home to a rogues’ gallery of Labor factional hacks and is up to its neck in often toxic internal party politics.

The right-faction HWU was aligned to former ALP powerbroker, now independent MP Adem Somyurek, whose recent demise after an Age investigation into branch stacking weakened the HWU and its backers.

Ms Mikakos is a senior left-faction minister, so is a factional rival to the HWU. The timing of the letter’s release – as Ms Mikakos was about to give evidence at the hotel quarantine inquiry –lends credence to a suggestion doing the rounds in Labor circles that this was more a factional hit than anything else. The HWU, of course, disputes this.

The HWU, which was previously known as the Health Services Union No.1 branch, has long been fought over as part of sub-factional warfare in Labor’s right at a steep cost to its low-paid members which include cleaners and orderlies. It was the union previously controlled by allies of the disgraced Kathy Jackson who Ms Asmar deposed.

Westpac - fresh from copping the biggest penalty in Australian corporate history - fell by as much as 2.3 per cent but trimmed its decline to 0.1 per cent by the close.

Weak manufacturing data helped knock the wind out of Wall Street’s sails, while Perpetual’s Matt Sherwood said in a note that concerns remain US markets are still overbought, despite a near 10 per cent selloff in recent weeks.

Further denting offshore sentiment was a plea from Fed chair Jerome Powell that more stimulus is needed to assist the world’s largest economy, in what is likely to be a long and slow recovery.

“This view contrasts with a lot of investors who had wagered that a combination of stimulus, virus control, and economic reopening would spark a large recovery,” Mr Sherwood wrote.

EY partner and investment banking veteran Duncan Hogg said local markets appeared content to follow the overseas lead amid a lack of other news.

He said volatility on the ASX would likely continue until the Federal budget is handed down on October 6.

“(The budget) may give people more confidence around where we’re going as a market generally,” Mr Hogg said.

“We’re all expecting a budget that is going to try and stimulate the economy. My view is that the opening the borders and the budget will hopefully build some positive sentiment leading into Christmas.”

The materials sector sagged by 1.5 per cent on Thursday with BHP, Rio Tinto and Fortescue Metals each losing between 0.2 per cent and 0.7 per cent.

Gold miners were hammered on softer precious metal prices, with Newcrest down 3.7 per cent at $30.69, Northern Star losing 3 per cent to $13.20, and evolution 5.3 per cent lower at $5.53.

Banks NAB and ANZ defied the wider ASX decline to rise 0.4 per cent and 0.1 per cent respectively, while Commonwealth Bank ended 0.1 per cent lower at $64.20.

Westpac initially fell 2.3 per cent to $16 after it confirmed it would pay a record $1.3 billion fine to AUSTRAC for breaches of money laundering laws.

The bank closed down 0.1 per cent at $16.37.

Among the other blue-chip firms, CSL dropped 0.3 per cent, Wesfarmers 0.2 per cent, Woolworths 1 per cent and Macquarie Group 0.4 per cent.

Afterpay weighed the tech sector down while energy stocks slumped by a collective 2.1 per cent.

There was rare support from Transurban, which rose 1.9 per cent to $14.72, and Fisher and Paykel, which jumped 1.8 per cent to $30.83.

He said the council had raised concerns about the cost of a possible event, although the government was prepared to share the financial load.

"If those costs can be removed, then we get a bit more time to plan this event. If all those costs are absorbed by the City of Sydney Council, they are really being forced to make a decision now," he said.

"Whilst we know whatever type of event we run won't look the same, it will have drastically different numbers attending and we will restrict the numbers in the city, it also gives us a chance to evaluate where we will be."

He added the government had received advice from NSW Police and NSW Health to mitigate COVID-19 risks, but if outbreaks or community transmission occurred in December, the government would call off any event.

If the fireworks do go ahead, Mr Ayres said it would only be the midnight event.