''It just goes to show that this is not just something that happens elsewhere, it could happen in countries like Australia if we relax our vigilance against terrorism and potential terrorism here on our shores.

''It does strengthen our resolve to do what we need to, to keep our community safe and strong.''

Mr Abbott said the murder of the American journalist - the online video of which has now been authenticated by US intelligence agencies - bolstered the case for stronger counter-terrorism laws and resourcing.

''This is why we do need new legislation to strengthen the powers of our security agencies to make it easier to detain and jail people who have been involved in terrorist activities overseas and why we also need legislation to ensure that the police and other security agencies continue to have access to telecommunications data.''

The Prime Minister also continued to leave open the option of greater involvement in Iraq, though he stressed there was no consideration of putting combat boots on the ground and insisted any intervention would be a humanitarian, not a military, act.