Prime Minister Tony Abbott has promised to be upfront with Australians about how the security system failed to put Sydney siege gunman Man Haron Monis under surveillance.
"The system did not adequately deal with this individual," he conceded on Wednesday morning.
"Two very decent people are dead, others are injured, others are traumatised because of a madman who was roaming our streets."
Monis and two of his hostages died at the end of a 16-hour siege in Sydney's CBD, in the Lindt cafe before dawn on Tuesday.
Mr Abbott said he intended to publish a report into what happened in the lead-up to Monday's siege and why Monis was not on any counter-terrorism watchlist.
The investigation will also look at how and where Monis got a gun.
The self-proclaimed cleric was well known to ASIO and federal and NSW police after a string of alleged crimes and sending threats to the families of dead Australian soldiers.
As recently as Sunday he railed against Australian "terrorism" on his website, vowing to fight the "oppression and terrorism of USA and its allies including UK and Australia".
"We want to know why he wasn't being monitored given his history of violence, his history of mental instability and his history of infatuation with extremism," Mr Abbott said.
It was impossible to monitor everyone all the time so security agencies made judgments about who posed the most risk, he said.
The threshold for placing someone on a watchlist was whether they were regarded as being at risk of committing violence against innocent people.
Opposition Leader Bill Shorten said it was understandable people wanted answers about how the system had failed.
But it was important not to have a blame game and instead allow authorities to get to the bottom of it, he said.
Mr Shorten is confident the answers will be found.
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