The unusual step would mark a major expansion of plans already flagged that would include suspending or revoking the citizenship of dual nationals who become involved with terrorism.

And in what appears to be a contrast to previous efforts to water down the Racial Discrimination Act Prime Minister Tony Abbott has signalled the government will clamp down on vilification and inciting hatred in a bid to curb religious preachers whom the government believes are fuelling extremism.

Mr Abbott, who on Monday released the government's counter-terrorism review, confirmed the proposals as among a raft of measures the government will call for to tackle home-grown terrorism.

In a speech at the Australian Federal Police headquarters in Canberra, Mr Abbott also announced the creation of a counter-terrorism coordinator to strengthen work between security agencies.

"We will ensure that returning foreign fighters are prosecuted or closely monitored using strengthened control orders," he said.

"We will appoint a national counter-terrorism coordinator. We want to bring the same drive, focus and results to our counter-terrorism efforts that's worked so well in Operation Sovereign Borders and Operation Bring Them Home."

Mr Abbott said since the national terror threat level was lifted to high in September there had been 20 arrests as a result of counter-terrorism operations in Australia.

He said that figure represented one third of all terrorism-related arrests since 2001.

"So the judgment to lift the terror threat level was correct," Mr Abbott said.

The Prime Minister said the Martin Place siege in December showed that the threshold for action against individuals that pose a security threat had "in too many instances" been set to high.

Mr Abbott said the only beneficiary of that "was the Martin Place murderer himself".

"This report marks a line in the sand. There is always a trade-off between the rights of an individual and the safety of our community," Mr Abbott said.

"But we will never sacrifice our freedoms in order to defend them, but we will not let our enemies exploit our decency either."

Mr Abbott said the government would look to strengthen Australia's immigration laws.

He said that would include developing amendments to the Australian Citizenship Act to give the government powers to revoke or suspend citizenship in the case of dual nationals.

For Australian nationals involved in terrorism, the government would look at suspending some of the privileges of citizenship.

"These could include restricting the ability to leave or return to Australia, and access to consular services overseas, as well as access to welfare payments," Mr Abbott said.

He said the government would also attempt to clamp down on "hate preachers".

Mr Abbott said for too long successive governments had been concerned about organisations that "breed hatred and sometimes incite violence".

"These organisations and individuals blatantly spreading discord and division such as Hizb ut-Tahrir should not do so with impunity," he said.

The Prime Minister gave few specifics but said efforts to crack down on such behaviour would include programs to challenge terrorist propaganda and publication of alternative material "based on Australian values".

Mr Abbott said Muslim leaders should be speaking out against extremism more.

"I've often heard western leaders describe Islam as a religion of peace. I wish more Muslim leaders would say that more often and mean it," he said.

"Everybody, including Muslim community leaders, needs to speak up clearly, because no matter what the grievance, violence against innocents must surely be a blasphemy against all religion."

Opposition Leader Bill Shorten said on Monday that the Muslim community was "the frontline with dealing with terrorism".

"The frontline of dealing with terrorism will be from within the communities in which these few violent extremists live," Mr Shorten said.

"I wouldn't want to release every briefing that we've ever had, but I have great confidence that periodically it has been Australian Muslims speaking up, working with our police and security agencies which have provided great assistance to defeating these people."

Mr Shorten said while Labor has taken a bipartisan approach on counter terrorism issues, any changes the government had proposed "must be shown to be effective for the nation as a whole".

Mr Shorten said the government's measures deserved "full and careful consideration".

He said Labor would work with the government, but the Parliament's committee process remained the best way of examining the proposals.

"Given Australia's character, our history, our love of freedom, there should always be a strong presumption in favour of the liberty of individual citizens," he said.

"Labor believes this presumption should only be reduced, rebutted or offset to the extent that current arrangements are proven to be inadequate."

Greens leader Christine Milne said there was "no justification" for the measures being proposed and the government should instead focus on social cohesion and bring Australians together.

Senator Milne described Mr Abbott's speech on Monday as "the effort of a failing and flailing Prime Minister trying to press the fear, anxiety, insecurity button to try to bolster his legitimacy as the Prime Minister".

"Surrounding himself in the Australian flags flanked by the military, by the Federal Police and attempting to use yet another three-word slogan - it worked for him in opposition, he thinks it's going to work for him in government. Australians are not going to fall for it," she said.

"The fact is the best way of helping Australians feel secure is to bring us altogether. Leadership at this stage should be about Australians coming together. That's why we should be talking about social cohesion."