Prime Minister Malcolm Turnbull has warned Islamic State militants are using the refugee crisis to send terrorist operatives into Europe.

Key points: Brussels terror attacks highlight "porous borders" in Europe, Mr Turnbull says

Brussels terror attacks highlight "porous borders" in Europe, Mr Turnbull says Indonesian President Joko Widodo praised for commitment to promoting inclusive Islam

Indonesian President Joko Widodo praised for commitment to promoting inclusive Islam South China Sea tensions addressed as Turnbull cites "raising anxieties" in the region

Mr Turnbull referred to the "recent intelligence" in a speech at the Lowy Institute in Sydney.

Mr Turnbull said the recent terror attacks in Brussels highlighted the "porous borders" of Europe and went on to praise Australia's strict approach to border control.

"For all intents and purposes there are no internal borders in Europe and their external borders are difficult to manage," Mr Turnbull said.

"Australia is better placed than many of our European counterparts in dealing with the threat of terrorism because of the strength of our intelligence and security agencies, our secure borders and our successful multicultural society; one that manages to be both secure and free."

Mr Turnbull made similar remarks earlier Wednesday, when he told the ABC security arrangements in Europe had been allowed to "slip".

Opposition Leader Bill Shorten has spoken out against the remarks, saying it was too soon to "hand out advice".

But Foreign Minister Julie Bishop said European ministers she had met with had acknowledged they were facing a "dire terrorist threat".

Ms Bishop told the ABC while there was a renewed sense of cooperation across Europe, there had been "failings in the past that have led to the current situation".

She said they were also looking at revisiting counter-terrorism legal framework in the wake of terror attacks.

"The countries that have been subjected to attacks are assessing their laws, their resourcing," she told 7.30.

Ms Bishop also defended the military campaign in Iraq and Syria, saying "we have to attack terrorism at its source".

Indonesia 'proof' moderation and Islam are compatible

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 7 minutes 54 seconds 7 m We have to attack terrorism at its source, says Australian Foreign Minister

Mr Turnbull also noted in his speech the work of Indonesian President Joko Widodo and his commitment to promoting a tolerant and inclusive Islam.

"He says again and again, Indonesia is proof that democracy, tolerance, moderation and Islam are compatible," Mr Turnbull said.

"Australia has a vital interest in seeing President Widodo's commitment to tolerance succeed.

"The executive director of the Islamic Council of Victoria wrote to me to say that the mere fact of my mentioning President Widodo's example has helped in combating extremism and promoting better, more tolerant and mainstream understandings of Islam and the Muslim world."

Prime Minister Malcolm Turnbull says Australia's defence white paper is crucial to the nation's security. ( AAP: Mick Tsikas )

Mr Turnbull also spoke on the importance of his Government's recent defence white paper, stating it was vital in ensuring Australia's security into the future.

He said within two decades, "half of the world's submarines and at least half of the world's advanced combat aircraft will be operating in our region".

"We simply have to do more and work harder to maintain our influence," he said.

"That is what our new defence white paper is all about."

Mr Turnbull also addressed tensions in the South China Sea, saying China's actions were "creating anxieties and raising tensions".

"Disputes of the South China Sea should be settled by international law, not by creating facts on the ground, or in this case land in the water. The growth of our region, especially China's has depended on a long period of more than 40 years of relative tranquillity. There is too much at stake to risk disturbing it."