Australian Prime Minister Tony Abbott has announced a fresh security crackdown that could deny welfare payments to people seen as potential threats.
Mr Abbott said in a statement that 110 Australians have joined Islamic State and another 20 have been killed in fighting there.
It posed a greater risk of terrorism at home than ever before, he said.
"The signs are ominous. ASIO currently has over 400 high priority counter-terrorism investigations, and that's more than double the number a year ago," he said.
"Australia has entered a new, long-term era of heightened terrorism threat, with a much more significant home-grown element."
Mr Abbott quoted an increase in the number of Australians returning from conflicts in Syria and Iraq to back up his argument that "the number of potential terrorists ... who may live in our midst is rising".
"Over 30 foreign fighters have returned to Australia and at least 140 people in Australia are actively supporting extremist groups," he said.
The Prime Minister's office also confirmed Australia's spy agency ASIO was currently investigating several thousand "leads and persons of concern".
The Government had previously said there were 90 Australians fighting in Syria and northern Iraq.
Mr Abbott proposed plans to simplify terror warnings and appoint counter-terrorism coordinator as part of a new anti-extremism strategy.
He has accepted a recommendation that Australia simplify the current system of terror alert warnings, which classifies threats as low, medium, high or extreme.
Recommendations dealing with the long-term funding for security agencies will be considered separately.
Mr Abbott said new laws would remedy failings on the immigration, welfare, policing and intelligence fronts by clamping down on supporters of radicals, especially welfare recipients.
The laws will also target so-called "hate preachers", Abbott said, citing as an example the radical but non-violent Islamist group Hizb-ut-Tahrir.
He explicitly linked welfare to terrorism, accusing dozens of Australians fighting in Syria and Iraq of having been on the dole, and adding that payments to "individuals assessed to be a threat to security" could soon be canceled.
"People who come to this country are free to live as they choose. Provided they don't steal that same freedom from others," he said.
An 'era of terror'
In response to a joint Commonwealth and New South Wales report into last December's Sydney siege, Mr Abbott yesterday warned that an "era of terror" meant Australia would need to reconsider "where it draws the balance" between personal freedom and community safety.
"Precisely where we draw the line in the era of terrorism will need to be reconsidered," he said.
"We need to ask ourselves, at what stage do we need to change the tipping point from protection of the individual to the safety of the community?"
That report, released yesterday, found the decisions of various government agencies which dealt with Lindt Cafe siege gunman Man Haron Monis were "reasonable".
But Mr Abbott said the community had been let down by the system which allowed Monis to remain at large, despite the serious criminal charges he was facing.
"Plainly, this monster should not have been in our community," he said.
Changes proposed to citizenship laws
Mr Abbott foreshadowed tougher visa, citizenship and immigration laws as well as measures to combat the spread of illegal firearms, promising he would have more to say about those measures in today's speech.
The Prime Minister recently said people who might be a threat to Australia had been getting the benefit of the doubt for too long.
Justice Minister Michael Keenan expanded on the Government's view this morning.
"What we need to do is to make sure that we've got robust systems so that [if] we extend the hand of friendship to somebody by giving them permanent residence or citizenship in Australia, we know they are going to be part of our team - not pose a threat to national security," Mr Keenan said.
"In the past I think people have been given too generous interpretations of their motives, and I think [it] has been said, they get the benefit of the doubt."
"Our immigration system needs to work with our national security agencies to ensure that it is doing everything it can to weed out people that might pose a threat to our community security in Australia."
Opposition Leader Bill Shorten said Labor was keen to work with the Government and would accept its offer of a briefing on intended changes.
"When it comes to keeping Australians safe, Labor and Liberal are in this together and we will work together in a considered way."
The Opposition Leader said he would be happy to examine the Prime Minister's proposals but cautioned against going too far.
"I don't believe our nation can only be safe if we get rid of the liberties of people, nor do I believe that the liberties of people in every sense should trump national security."
Change to laws 'ludicrous'
Leading human rights lawyer Julian Burnside QC said Mr Abbott's call for tighter immigration and citizenship laws in the wake of the Sydney siege were unwarranted.
"I'm not even sure you can say it's a bad judgment," he said.
"We simply do not know what facts were known by Immigration when they assessed [Monis] as a refugee in 1996, but to say that the system failed because 20 years later he turns out to be a bad egg, I think is just ludicrous."
"If politicians can make a country fearful and make them think that they are being protected from something fearful, they will gain political support."
"So yes I think there's a real risk that he's doing this in order to play on community fears and thereby gain a bit of political popularity."
The former national security legislation monitor Bret Walker said there was no system failure in the lead up to the Sydney siege.
Mr Walker also had concerns the Government was framing the terror threat as being at crisis point.
"This is not anything in the nature of a so-called crisis, the point about counter terrorism [is] it's going to be continuing effort," Mr Walker said.
"There are not peak occasions where we can, for a very short time, trade away liberties for short-term protections, this is a permanent state of affairs and that's why the Prime Minister correctly says the debate about where to strike the balance has to be ongoing and is inevitable."