The Prime Minister, who spent the weekend attending mosques and churches in Sydney, said ensuring people could pray without fear of violence is the first step of religious freedom.
"Religious freedom is not just an inalienable right as free citizens, it is important to the very cohesion of our multicultural society."
The grants will be available for CCTV cameras, lighting, fencing, bollards and alarms.
Mr Morrison also used the speech to lament the rise of "mindless tribalism" turning debates into ugly conflicts and encouraging people to view those with opposing opinions as "worthless".
He cited debates about border policy and lowering the migration cap as examples of issues hijacked by "tribalists" as a tool to divide society.
"Just because Australians are worried about traffic jams and quality of life especially in a sprawling city like Melbourne, does not mean that they're anti-migrant or racist."
His comments come after calls for politicians to reflect on whether their own rhetoric, particularly on refugees and migrants, had fanned Islamophobia in Australia.
Greens Senator Mehreen Faruqi accused the Prime Minister and Home Affairs Minister Peter Dutton of "dog whistling" and race baiting for years.
But Mr Morrison said his views had been driven by a desire to preserve Australia's immigration program and prevent the people smuggler trade.
"I've always never sought to question the compassionate motives of those who hold a different view to me on this topic.
"We can disagree about policy measures, but I've rarely had that courtesy extended back to me."
'All 25 million Australians are us'
Echoing New Zealand Prime Minister Jacinda Ardern's words after the Christchurch attacks, Mr Morrison wanted to assure all Australians they belong.
"I believe, not in a tribalism that divides, but in an ‘us; that unites,” he said.
“So let me affirm today what ‘us’ means: Indigenous Australians are us. Immigrant Australians from all nationalities and backgrounds, including Chinese, Lebanese, Greek, Indian, Turkish, Vietnamese, just to name a few, are us.
"Muslim Australians are us. Christian Australians are us. Jewish Australians are us. Hindu Australians are us. Atheist Australians are us.
“LGBTIQ Australians are us. Whoever you vote for - us. Older Australians are us. Young Australians are us. Female Australians are us. Male Australians are us. Regional Australians are us.
“From the bottom of Tasmania to the tip of Cape York, from Byron to Broome, all 25 million Australians are us.”