The federal government has placed too much emphasis on fighting terrorism with an iron fist rather than making a real difference on the ground, the state's new Police Minister and Deputy Premier said.

Taking aim at the federal government for what he saw as an ASIO-led approach to counter-terrorism, Troy Grant has indicated he wants to invest more in prevention and community programs that have been allowed to lapse.

NSW Police Minister Troy Grant believes 'there's an imbalance in the investment' when it comes to counter-terrorism. Credit:Dallas Kilponen

His call for more community-led initiatives came as the federal government confirmed it had not yet allocated a single dollar from its community grants program for deradicalisation.

In an interview with Fairfax Media a week after his appointment as Minister for Police, Mr Grant also indicated that he has not ruled Deputy Commissioner Catherine Burn out for the job of police commissioner despite allegations she unjustifiably bugged Deputy Commissioner Nick Kaldas, fuelling a decade-long war in the force's top echelons.