Attorney-General George Brandis has confirmed the Federal Government is planning to make it illegal to promote or incite terrorism.

Senator Brandis has outlined the way the Government is heading on its second tranche of national security laws, after introducing the first wave to parliament on July 16.

The first tranche was designed to update and strengthen the powers of the domestic spy agency, ASIO.

Now the Attorney-General is turning his attention towards laws covering terrorism.

He says he is taking on the laws which make it a crime to promote terrorism in light of growing concern about the threat of Australians being radicalised in Middle Eastern conflicts.

"At the moment our criminal code, which was rewritten after 9/11, is quite narrow in the proscriptions that it provides against encouraging terrorism. You have to identify a particular terrorist act," he said.

Senator Brandis says that should be broadened to cover the promotion of terrorism generally.

"If it's a crime to incite violence, surely it ought to be a crime to promote or incite terrorism," he said.

The Federal Government says about 160 Australians are currently fighting with, or assisting, terrorist groups in the Middle East.

On Tuesday police confirmed warrants had been issued for two Australian Islamic State fighters, after photographs were posted on social media of one of them brandishing the severed heads of Syrian government soldiers.

New South Wales Police have warrants seeking the immediate arrest of Khaled Sharrouf and Mohamed Elomar for terrorism offences if they return to Australia.

A Twitter account, purporting to belong to Sharrouf, published photos on Thursday and Friday of Elomar holding the severed heads.

Labor wants to see more detail on Brandis 'thought bubble'

Shadow attorney-general Mark Dreyfus says he wants to see more detail about Senator Brandis's plans.

He says Australia's terrorism laws are already broad, with changes brought by the Howard Government in 2002 and 2006.

"It is already a crime to incite violence. I think rather than these thought bubbles from the Attorney-General, he needs to produce some written proposals. We will look at them if he is serious."

Senator Brandis says the Abbott Government has a profound commitment to freedom of speech, but not when comes to violence and terrorism.

In March, he defended the Government's plan to amend a key part of the nation's racial discrimination laws, saying people have "a right to be bigots".

He says he will always defend the right of people to say unpopular, offensive or socially unacceptable things.

"If you are going to be a free country you have to allow that people should be able to say radical things, provocative things, things that other members of the community might find objectionable," he said.

"But free speech in my view does not go so far as to enable people to say things that actually constitute the incitement of violence or the encouragement of terrorism."

Senator Brandis also says changes are coming to make it easier for the Australian Federal Police (AFP) to arrest terrorism suspects.

He told 7.30 on Tuesday he was considering lowering the evidentiary bar used by police investigating terrorism offences.

He says an AFP officer's threshold for arrest should be lowered from a "reasonable belief" that a crime has been committed, or is being planned to a "reasonable suspicion".

"The Commonwealth's criminal law hasn't actually kept pace with developments in criminal law elsewhere. So we're looking at changing the requirement, the pre-condition for the AFP making an arrest from reasonable belief to reasonable suspicion."

If passed, the change would bring AFP officers in line with state police forces.