Sort of - in this case they have no choice. They previously held up New South Wales as the "gold standard" in contract tracing and halting the spread of the virus; so if the NSW Government says they have to lock down, the Federal Government pretty much has to go along with it.

But you can be sure that as soon as NSW's case numbers come down enough, the Federal Government will pressure them to start lifting restrictions, as they did towards the end of Victoria's 4 month lockdown last year.