Australia is in the grip of an ice epidemic that's worse than any previous drug problem the nation has faced, Prime Minister Tony Abbott says.

Mr Abbott was in Sydney on Wednesday to announce the formation of a national ice taskforce to look at how combat the drug, which the prime minister labels "pernicious and evil".

Prime Minister Tony Abbott says about 400,000 Australians use meth each year. Credit:Alex Ellinghausen

Former Victorian police commissioner Ken Lay will lead the taskforce and assistant Health Minister Fiona Nash and Justice Minister Michael Keenan will oversee its work.