Malcolm Turnbull says Australia plans for all contingencies but he's refused to outline preparations in the event of conflict with North Korea.
The prime minister told reporters in Canberra the government is very alert to the unfolding situation, and it's constantly under review.
"We obviously plan for all contingencies ... but I'm not going to get into speculative territory," he said on Thursday.
Mr Turnbull again urged Pyongyang to come to its senses and praised the latest tough sanctions imposed by the UN Security Council.
Earlier, Foreign Minister Julie Bishop moved to reassure Australians the country wouldn't automatically be drawn into any war between North Korea and the United States.
She's also downplayed Donald Trump's threatening words to North Korea, after the US president threatened Pyongyang with "fire and fury".
Ms Bishop echoed Secretary of State Rex Tillerson's claim the president was speaking in language that Kim Jong-un could understand, because clearly he didn't understand diplomatic language.
"The United States is entitled to defend itself and its ally, but the strategy is to force North Korea, through diplomatic and economic means, to stop its illegal ballistic missiles and nuclear weapons programs," she told the Nine Network on Thursday.
Ms Bishop says Australia has been in "constant discussion" with the US over the issue, but it wouldn't necessarily be drawn into conflict should matters escalate that far.
"We were not a party, in the legal sense, to the (Korean War) armistice so there is no automatic trigger for Australia to be involved," she told ABC radio.
"As far as the ANZUS alliance is concerned, that is an obligation to consult."
But the Greens' Defence spokesman Peter Whish-Wilson questioned Australia's reliance on the ANZUS alliance in the first place.
"Most Australians see the US leader and North Korean leader, both of them, mad as cut snakes," he said.
"It's not helpful in the world we live in now when World War III could be declared on Twitter by the US president."
Senator Whish-Wilson said Ms Bishop needed to take a leadership role by calling for a de-escalation in rhetoric.
"It should be an entirely avoidable conflict," he said.
