The Prime Minister's national security address will reveal the sobering findings of a review of the nation's counter-terrorism machinery, which warns of a growing long-term terrorism threat that is becoming harder for police and intelligence agencies to combat.
Preventing attacks is becoming tougher because extremists' slick online messages are grooming the socially isolated, Mr Abbott will say.
"Low-tech terrorism, needing little more than a camera-phone, social media account and a knife, means that it is becoming harder for police and security agencies to anticipate and disrupt attacks."
He will say security agencies have assessed that, in the current threat environment, another terror attack is likely.
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Mr Abbott yesterday flagged a crackdown on individuals and groups that promote hatred, a tightening of citizenship and visa controls and a revamp of the national terrorism-warning system to make it more easily understood.
A group in his sights is the Sunni political organisation, Hizb ut-Tahrir, which is noted for its extremist views, although it has not directly advocated terrorism.
Mr Abbott says security agencies must develop closer links with communities to better identify those who might join Islamist groups.
The Prime Minister will confirm today that the number of serious terrorism investigations is rising and ASIO is examining several thousand leads and people of concern, with more than 400 high-priority cases. He will argue that individual rights must be balanced against the need to protect the community.
Mr Abbott yesterday released a report on the Martin Place siege, the joint federal-NSW inquiry calling for tougher immigration and gun laws, and the cross-checking of bail applications with the accused's links to terrorist organisations or violent extremism.
Mr Abbott said: "Obviously, in a society such as ours, we cherish the rights of the individual, as we should. We cherish the fact that we are a free and open and welcoming society, as we must always be, but what's pretty obvious from this report is that at every stage this individual (Lindt cafe gunman Man Haron Monis) was given the benefit of the doubt and, plainly, the cumulative effect of the benefit of the doubt being given to him time and time again is that he was able to wreak havoc on our community.
"My judgment is that - while having always to respect both - the question of precisely where we draw the line in the era of terrorism will have to be reconsidered and the line may have to be redrawn."
The review of security agencies supported the decision last year to lift the national terrorism threat level. "Since then we have witnessed the frenzied attack on two police officers in Melbourne and the horror of the Martin Place siege," Mr Abbott says.
The review of counter-terrorism machinery concludes that the nation has entered a new, long-term era of heightened terrorism threat, with a much more significant home-grown element.
"On all metrics, the threat to Australia is worsening," Mr Abbott says. "The number of foreign fighters is increasing, the number of known sympathisers and supporters of extremists is increasing, and the number of potential terrorists, including many who live in our midst, is rising as well.
"There are at least 90 Australians fighting with and supporting terrorist groups in Iraq and Syria. Over 30 foreign fighters have returned to Australia and at least 140 people in Australia are actively supporting extremist groups.
"Thousands of young and vulnerable people in the community are susceptible to radicalisation. Terrorists are becoming more adept at evading surveillance."
So far, 74 passports had been cancelled and the government has strengthened measures to ensure people of security concern will not be able to depart Australia using foreign passports.
The review says that Australia has strong, well co-ordinated counter-terrorism arrangements and there is no reason to make major structural changes.
Mr Abbott has accepted its recommendations to strengthen co-ordination among agencies.
There will be initiatives to counter violent extremism, manage the return of foreign fighters and improve community understanding of the threat level.
"The government will appoint a national counter-terrorism coordinator to bring the same drive, focus and results to our counter-terrorism efforts that worked so well to stop the boats in Operation Sovereign Borders," Mr Abbott will say. It has been suggested such a role could be filled by ASIO chief Duncan Lewis, who has experience as a major-general in the army, as a special forces commander and as ambassador to NATO.
A new national counter-terrorism strategy will be developed with the states and territories to better co-ordinate efforts to counteract threats, including home-grown lone actors and radicalisation in the community.
This strategy to counter violent extremism and build community cohesion will be considered at a Council of Australian Governments meeting.
The review recommends the terrorism alert system be replaced with a simpler, clearer system, with more information about what the threat is and what precautions people might take.
The Prime Minister notes that, in the past six months, 20 people have been arrested and charged as a result of six counter-terrorism operations around Australia.
The government will separately consider the review's options to address long-term agency funding in the budget.
Releasing the joint NSW-federal report on the siege in which Lindt Cafe manager Tori Johnson, barrister Katrina Dawson and Monis were killed, Mr Abbott said Australia would embrace people, but would not endlessly tolerate those "having a lend of us''.
He would find ways to stop extremists slipping through the visa and citizenship nets.
Mr Abbott and NSW Premier Mike Baird released the first report on the siege which covers Monis's dealings with Immigration officials, ASIO, other government services and the justice system. Monis was on bail at the time of the cafe attack, facing charges including sexual offences and abetting his ex-wife's murder.
Mr Abbott said that "plainly, the system failed".
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