There are nearly 2000 spare beds in the Government's quarantine and managed isolation facilities but hotels in Dunedin are still being looked at as the number of arrivals increases.
Cabinet Minister Megan Woods and Air Commodore Darryn Webb, who oversee the facilities, have been touring hotels in the south to see if any would be suitable to add to the 31 hotels nationwide that the Government is already using.
Today, Woods said Queenstown and Invercargill had been ruled out because they didn't meet the criteria, which include health capacity, capacity around hotels, and the number of hotels for critical mass.
A lack of mental health services and no hospital were factors at play in Queenstown, and political pressure had not played any role, she said.
"We're continuing to appraise Dunedin as a suitable location."
She said no further 501 deportees from Australia were scheduled to fly in to New Zealand next week.
Webb, who is in charge of operations at the facilities, said the current capacity was 6513 people across 31 facilities. Capacity would be further expanded in the next week.
There were 17 recommendations around resourcing, lines of accountability and processes from the review of the end-to-end system, and 12 had already been implemented.
He said processes had been tightened especially around arrivals and transport from the airport to a facility.
Woods said she had not heard about reports about used PPE or water bottles in the Jet Park in Auckland, where positive Covid people or people with symptoms are held.
If that was happening, she said it "wouldn't be good enough" as there were clear protocols and those rooms were routinely deep-cleaned.
A new health order came into effect on Tuesday, she said, which clarified that accountability for quarantine and managed isolation facilities sat with the Ministry of Business, Innovation and Employment.
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As of July 14, more than 29,000 people had come through facilities across five cities in NZ - Auckland, Hamilton, Rotorua, Wellington and Christchurch.
The number of expected arrivals in the next week is 1800, but that swells to 2800 the following week. This is balanced by roughly the same number of people expected to leave the facilities in the next fortnight.
There were four escapes from managed isolation facilities across a week, the most recent one being a week ago, triggering a review of processes and leading to a 24/7 police presence at each facility.
Those who escaped are all facing charges.
The Government is also looking at tightening monitoring, including the possible use of electronic bracelets.
Other issues still being considered are co-payments, as has been introduced in Queensland and New South Wales, and the suspension of compassionate leave.
The Government's consideration of Queenstown and Dunedin as quarantine or managed isolation destinations kicked off the series of events that led to resignations in the National Party.
Clutha-Southland MP Hamish Walker put out a statement expressing his concern about the arrival in the south of people from India, Pakistan and Korea, which led the Government to accuse him of racism.
Walker then released confidential information to the media to back up his claim - a move that was universally condemned and led to him announcing his retirement from politics.
Then-leader Todd Muller's handling of the issue preceded him standing down as leader on Tuesday, and that was followed by Nikki Kaye and Amy Adams deciding to retire from politics at the next election.
Party stalwart Michelle Boag, who had provided the information to Walker and to Michael Woodhouse, resigned all positions to do with the National Party.
Woodhouse was stripped of his health spokesmanship for failing to tell the Health Minister that he had received confidential information.