Tony Abbott says he wants quick answers from a review into the Sydney cafe siege.
The head of the prime minister's department and NSW Premier Mike Baird's most senior public servant will examine how Iranian refugee Man Haron Monis was granted citizenship and came to the attention of police and spy agencies.
Mr Abbott also said he wanted to know how a man with a history of violence had a gun licence.
Court documents from 2011 reveal Monis had a gun licence while working as a security officer but it had expired, but NSW Police say there's no record of him having held a firearms licence.
Monis, who had been on bail as an alleged accessory to murder, and two hostages died at the end of the Lindt cafe siege early Tuesday morning.
He had also been on an ASIO watch list in 2008 when he sent offensive letters to the families of dead Australian soldiers, but dropped off the list.
"We do need to have the answers as quickly as possible so that any lessons can be put into place as quickly as possible," Mr Abbott said.
Immigration laws will also be reviewed to remove any doubts about gaps in security checks, he said.
Mr Abbott all but confirmed Iran had previously sought Monis for extradition over fraud charges.
"I share the exasperation of the Australian public at what appears to be someone who has been having a lend of us at the very least for so many years," he said.
A committee examining new data retention laws - the third round of counter-terrorism measures proposed by the Abbott government - held a minute's silence before taking evidence from security officials.
ASIO deputy director-general Kerri Hartland said her agency was working with NSW and federal police to investigate the siege.
She said terrorist attacks against Australia were not hypothetical.
"Australia is a terrorist target and recent events have once again demonstrated that Australia is not immune from acts of terror," Ms Hartland said.
Australian Federal Police Commissioner Andrew Colvin said requiring telcos to keep two years of customer data was essential to fighting terrorism.
He said accessing data had already prevented two major terrorist attacks in recent years, but police feared the emergence of small internet providers that dumped their data after only months would have grave implications for disrupting crime.
Former attorney-general Philip Ruddock questioned why the new laws exempted internet cafes.
"It would be just another place for people to say, 'I can go there and nobody can monitor my movements'," he told the committee.
The committee heard small providers were kept out of the laws because of the compliance cost.
Another Liberal member, Senator David Fawcett, suggested the laws be amended to limit data access to only government agencies.
Labor members of the committee said the government had not released figures on how much it would cost the industry and what public money would be used to compensate companies.
Attorney-General George Brandis has promised to cover the "reasonable costs" of the industry.
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