Though some employers were considerate enough to allow employees to work from home, some have asked staff to report to work now
The six-times world champion broke ranks with other drivers who said they were comfortable with assurances received from the governing FIA, even as other sports cancel events and competitions around the globe.
"I am really very, very surprised we are here," Briton Hamilton told reporters at the Albert Park media centre on Thursday, a day before the cars roll out for the first free practice sessions at the circuit.
"It is great we have races but for me it is shocking that we are all sitting in this room.
"There are so many fans already here today.
"It seems like the rest of the world is reacting, probably a little bit late.
"But already this morning we've seen (US President Donald) Trump shutting down the borders from Europe ... we're seeing the NBA has been suspended yet Formula One continues to go on."
Hamilton said he feared for the health of the elderly in particular, and fans attending Albert Park, where more than 300,000 flocked during last year's race, according to organisers' estimates.
Several staff from the Haas and McLaren teams have been placed in quarantine and tested for the coronavirus, prompting Victoria state's top health official to warn that the race could be cancelled.
The results of the tests are expected later on Thursday but Hamilton was sceptical they would come out before the race.
"I heard the results are not going to come back for five days or something. Coincidence?
"Cash is king.... I don't feel like I should shy away from my opinion.
"Really for the fans, I really, really hope they can take precautions. I was walking through and seeing everything going ahead like it's a normal day. And I don't think it really is."
Thousands of fans poured into Albert Park on Thursday as race-week kicked off with practice and qualifying for lower-profile motor sport circuits.
The Chinese Grand Prix, which was scheduled for April, has already been postponed while the Bahrain race on March 22 will go ahead without spectators.
Doubts have also grown about next month's race in Vietnam due to its quarantine measures.
McLaren driver Carlos Sainz said everyone in the paddock was concerned about the virus and that only time would tell if ploughing ahead with Sunday's race was the right call.
"We are obviously concerned with the situation but we are drivers and we don't really understand what is exactly going on worldwide, if it's safe to do it in Australia or Vietnam or whatever," the Spaniard told reporters.
The Australian Grand Prix Corporation has declined to comment on the possibility of Sunday's race being cancelled or postponed or provide any public briefing to allay concerns.
"I don't know if it's the right thing that we are here. Probably not," said Alfa Romeo driver Kimi Raikkonen.
"But it's not up to us, it's not our decision. I think if it would be purely all the teams' decision we probably wouldn't be here."
Though some employers were considerate enough to allow employees to work from home, some have asked staff to report to work now
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