A royal commission into Australia's devastating bushfires will look at the impact of climate change, the operational response at a state and local level and the role of the federal government.

Prime Minister Scott Morrison flagged the inquiry on Sunday as he conceded there were things he could have handled better at a personal level.

Mr Morrison has faced weeks of criticism - as the bushfires death toll rose to 28 - starting with his decision to take his family on a holiday to Hawaii and flowing through to his fire-ground visits during which he was met with anger and frustration.

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The latest plank in the federal response is a $76 million mental health plan to provide support to firefighters and residents in affected communities, but more announcements are expected in coming weeks including a royal commission and further support for small business.

"There are things I could have handled on the ground much better," Mr Morrison told ABC TV.

"These are sensitive, emotional environments.

"Prime ministers are flesh and blood too in how they engage with these people."

“We’ll reduce our emissions further without a carbon tax and putting up prices, without shutting down traditional industries” @ScottMorrisonMP “The cabinet and the government will continue to evolve our pomsies to meet our targets and to beat them” #auspol @SBSNews — Brett Mason (@BrettMasonNews) January 11, 2020

He said in hindsight he would not have taken his family for a holiday to Hawaii, despite being defensive about it in a radio interview at the time.

His original intention was to holiday, as was routine for his family, on the NSW South Coast.

Mr Morrison said the scale of the bushfires was "unprecedented" and had created a situation in which Australians were demanding a greater response from the federal government than had been provided in the past.

"That was not something that was recommended going into this fire season," he said.

"There is a very new appetite, a very new expectation."

Are you open to lifting the emissions reduction target? PM: “We have set our targets and we intend to meet and beat them and to evolve our policy to ensure that we reduce emissions as much as we can within the policy framework,” @SBSNews #auspol #AustraliaFires pic.twitter.com/R23IzJxCcd — Pablo Viñales (@pablovinales) January 12, 2020

Meeting this new expectation could require federal legislation and new agreements with state and territory governments.

The prime minister said calling out 3,000 defence reservists to help with the bushfires and instructing the defence force chief to act regardless of any request from the states had taken the federal government into "extreme constitutional territory", which required clarification and discussion with the premiers.

Consideration would also be given to laws enabling a "federal state of emergency" to be declared - something that does not exist at present but would likely require a referral of powers from the states and territories.

As well, details of a royal commission would be put to the premiers and federal cabinet in coming weeks, he said.

"I think Australians have a very reasonable expectation that any commission of inquiry, royal commission, would need to cover the full gamut of issues."

Facing criticism that federal authorities sat on their hands earlier in the bushfire season, Mr Morrison said his government had acted on all recommendations put to it.

He said the government's climate policy would continue to "evolve", including its emissions target, and adaptation and resilience measures.

Labor leader Anthony Albanese said the bushfires clearly required national leadership.

"Bushfires do not recognise state and territory boundaries," he told reporters in Hobart.

Mr Albanese supported the idea of climate policy being included in the royal commission, but called on Mr Morrison to ensure the inquiry was not used to delay action.

Meanwhile, the Australian Council of Social Service welcomed the mental health spending but urged the government to boost disaster recovery payments and allowances and review the affordability of insurance.

"As extreme weather events increase in Australia, insurance premiums are escalating and too many people, particularly people on low incomes, find themselves under-insured or not insured," ACOSS chief Cassandra Goldie said.