The Coronavirus Disease 2019 (COVID-19) is a major virus outbreak of the 21st century. The Australian government and local authorities introduced some drastic strategies and policies to control the outspread of this virus. The policies related to lockdown, quarantine, social distancing, shut down of educational institute, work from home, and international and interstate travel bans significantly affect the lifestyle of citizens and, thus, influence their activity patterns. The transport system is, thus, severely affected due to the COVID-19 related restrictions. This paper analyses how the transport system is impacted because of the policies adopted by the Australian government for the containment of the COVID-19. Three main components of the transport sector are studied. These are air travel, public transport, and freight transport. Various official sources of data such as the official website of the Australian government, Google mobility trends, Apple Mobility trends, and Moovit were consulted along with recently published research articles on COVID-19 and its impacts. The secondary sources of data include databases, web articles, and interviews that were conducted with the stakeholders of transport sectors in Australia to analyse the relationship between COVID-19 prevention measures and the transport system. The results of this study showed reduced demand for transport with the adoption of COVID-19 prevention measures. Declines in revenues in the air, freight, and public transport sectors of the transport industry are also reported. The survey shows that transport sector in Australia is facing a serious financial downfall as the use of public transport has dropped by 80%, a 31.5% drop in revenues earned by International airlines in Australia has been predicted, and a 9.5% reduction in the freight transport by water is expected. The recovery of the transport sector to the pre-pandemic state is only possible with the relaxation of COVID-19 containment policies and financial support by the government.