The Australian Strategic Policy Institute says Australia must help strengthen the governments of Papua New Guinea, Solomon Islands and Vanuatu to help prevent their possible use as bases for terrorists.
The government-funded think-tank has highlighted these countries as potential terrorist havens because of their weak security infrastructures and general instability.
The Institute's Aldo Borgu says while he wouldn't overstate the possiblity of infiltration by Muslim extremists in Pacific countries, control over territory is uncertain and corruption is rife, especially with money-laundering.
"Our concern is a wider stability issue, I mean it goes far beyond terrorism. In fact the South Pacific is a perfect example of the security challenges for Australia and New Zealand beyond terrorism and things that are not necessarily affected by them. A lot of these countries, their governments are actually struggling to survive and this is why we certainly need to look at way that we approach the governments and our apolicies and look for new approaches."
Aldo Borgu says Australia must play a role of support in reconstructing these nations, which doesn't necessarily entail a big part for the military to play.