The Federal Government is still struggling to understand how he was granted parole despite having terrorism links.
The Prime Minister is playing down suggestions from Victoria that Australia's spy agency should have the power to intervene in future parole decisions.
Twenty-nine year-old Australian citizen and former Somali refugee Yacqub Khayre was killed by police after he murdered a man, took a hostage and shot three police officers on Monday.
Police said he had made claims that night he was doing it for al-Qaeda.
He had been acquitted of involvement in a planned terrorist attack on a Sydney Army barracks in 2009, but had a lengthy criminal history.
Despite that, the Victorian legal system granted him parole in December.
The head of Victoria's Adult Parole Board, Judge Peter Couzens told Melbourne radio station 3AW:
"The board received absolutely no information from either corrections or external services which would cause us to have any concerns about risks to the public. We had been told nothing about him that would indicate any suggestion of risk. Had we been told, we would've acted."
Attorney-General George Brandis says the parole board should've looked at his entire legal history.
"The Victorian Parole Board apparently only looked at the charge under which he'd been imprisoned and didn't look back beyond that to the fact he had terrorist antecedents. Had they done so, it's inconceivable he would've been released on parole so readily."
Prime Minister Malcolm Turnbull told 3AW he agreed.
"Everybody knew, it was a matter of public knowledge, that he had been involved in extremist activities. Yes, he had been acquitted but there was no doubt he had associations and engagement, involvement with violent extremist elements."
Judge Peter Couzens said counter-terrorism police did contact them about Khayre, but only to ask for a current phone number so they could return some property to him.
"You would've thought, Neil, that if the federal authorities were concerned about this person as a risk, they would've been more concerned about that then returning property to him."
Facing intense scrutiny about how this happened, Victorian premier Daniel Andrews told Channel Seven criminals with known terrorist links should only be released from prison with Commonwealth approval.
"ASIO and the Australian Federal Police are after all the primary experts in this matter. This is a national issue and we need to work together and all be involved in this."
The Prime Minister is unimpressed by the proposal.
"Of course it can seek advice and information from other agencies but I think many Victorians would be shaking their heads at the prospect of the Victorian Premier wants to abdicate his responsibility as leader of the government of Victoria."
Attorney-General George Brandis says every state needs to take a stronger stance on parole for those with terrorist links.
"I think the public are entitled to expect that for people who present that level of danger to the public and who have a terrorism backgound, there should be a presumption against bail or parole except in a very clear case."
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