Prime Minister Tony Abbott has warned MPs that extremism will get worse before it gets better following counter-terrorism raids and arrests in Sydney.
NSW Police arrested two men in the raids in Sydney's west on Tuesday, the same day they were allegedly planning to maim or kill someone in a knife attack.
Officers seized a machete and a hunting knife as well as a video allegedly detailing the plot.
The pair have been charged with preparing to commit a terrorist act.
"Police acted because they assessed a terrorist attack was imminent," Mr Abbott told parliament on Wednesday.
The video allegedly depicts the men kneeling in front of a large Islamic State flag while making a statement in Arabic.
Mr Abbott said it was imperative that police and security agencies be supported as IS, also known as Daesh, reached out all around the world, including in Australia.
"Regrettably there are people in this country who are susceptible to these incitements to extremism and even terrorism," he said.
"This is a serious problem and I fear it will get worse before it gets better."
Mr Abbott said some 90 Australians were fighting with Daesh in Syria and Iraq, with another 140 active supporters in Australia.
About 20 had been killed and another 20 had returned home.
Attorney-General George Brandis said the raid could not have occurred without changes to federal laws.
He told parliament the Australian Federal Police commissioner had told him the arrests would not have been able to be made under the higher tests of previous legislation.
