The group, set up after the London bombings to address Islamic extremism and promote tolerance, has handed its final report to the government.
Parliamentary secretary for multicultural affairs, Andrew Robb, says he is uncertain about the need to extend the body's life, even though some in the Muslim community are not happy about it.
"I thought it did an excellent job carrying out (its) function," Mr Robb told ABC Radio.
"The report has been tabled with me and we've adopted 58 of the proposals.
"It was a really positive and strong initiative."
Mr Robb said the government already received advice on similar issues through its council for multicultural affairs, whose term also expired recently.
"We do a disservice in some respects maintaining separate bodies. The issues are common and we should be treating all of those coming to Australia in a similar way," he said.
He said some in the community were a little confused about the role of reference groups and expected them to be and act as a lobby group.
"I think that's totally unproductive. I've got a very high regard for lobby groups in our democratic society but they shouldn't be government-funded," he said.
"I just want to make sure I've got a body that's set up, that gives me straightforward frank advice and doesn't end up just being a lobby group."