A man accused of throwing an improvised explosive device into a large crowd of protesters should face "the full force of the law", Prime Minister Anthony Albanese said.
The 31-year-old, who cannot be named for legal reasons, has been charged over the attack at Monday's Invasion Day rally in Perth.
Police on Tuesday revealed the device was designed to "explode on impact", but it did not detonate.
The accused faced Perth Magistrates Court on Tuesday charged with an unlawful act or omission with intent to do harm, and with making or possessing explosives under suspicious circumstances.
He did not apply for bail and the matter was adjourned until 17 February.
The court granted a suppression order of the man's identity due to fears for his safety.
Albanese earlier said the man's alleged actions were shocking.
"My view … is that they should throw the book at him," he told reporters in Darwin.
"This was an incident that is quite shocking. He's been charged with two serious offences and I look forward to him being prosecuted to the full force of the law."
Invasion Day rally evacuated
Police evacuated Forrest Place in central Perth shortly after noon on Monday after an object was found near the main stage, where about 2,500 people were gathered.
The man removed the device from his bag and threw it into the crowd from a first-floor walkway before fleeing, police alleged.
Forensic teams searched the man's home on Monday and the device was examined by the bomb response unit.
It was confirmed to be a homemade improvised explosive device containing a mixture of volatile chemicals, with nails and metal ball bearings attached to the exterior, police said.
A combination of chemicals and materials consistent with the manufacture of homemade explosives were found at the home, police said.
WA Police Commissioner Col Blanch said it was fortunate the device did not explode.
"For whatever reason it hasn't detonated, but it is explosive compounds and it did contain the ball bearings and the screws and/or nails," he told Perth radio station 6PR on Tuesday.
All major capital cities hosted Invasion Day protests, while opposing right-wing March for Australia rallies took place in capitals and some regional centres on Australia Day.
January 26 is a day of mourning for many Indigenous people, marking the First Fleet's 1788 arrival and the start of British colonisation.
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