Speaking at the Grattan Institute in Melbourne, the coalition's treasury spokesman voiced his concern about individual liberties being eroded.
Australia's response to the threat of terrorism should be to enhance and expand liberty, not curb or curtail it, he argued.
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"As a liberal, a legislator and a lawyer, it is the anti-terrorism laws, enacted by a government of which I was a member, that has given me great cause to reflect on our individual rights," Mr Hockey said.
'Laws should be reviewed'
Anti-terror laws should therefore be reviewed, and possibly repealed if they were no longer needed.
"It is my own view that the loss of individual liberty that these laws represent cannot stand for all time," he said.
"What we must do is objectively, dispassionately and regularly review their efficacy, preferably in a bipartisan way.
"I would not find it acceptable to declare a situation an emergency one day and then declare it permanent the next."
Internet filter under fire
Mr Hockey also criticised the federal government's proposed internet filter.
"I have personal responsibility as a parent," he said. "If I want to stop my children from viewing other material that I feel is inappropriate, then that is my responsibility to do something about it, not that of the government."
On the theme of liberalism, Mr Hockey took aim at the idea governments were to blame if people ate unhealthy food, drank to excess or a company went bust.
Government actions could erode liberties Australians enjoyed.
"I fear that step-by-step and in a way that barely registers in the consciousness of most people, we are losing some of the protections against the arbitrary and interfering actions of the state."
