Sydney: Australia will strengthen immigration laws and crack down on groups that incite hatred under a raft of counter-terrorism measures intended to combat the threat from home-grown terrorists.

Prime Minister Tony Abbott announced the nation's new anti-extremism strategy today following the release of a government review into December's deadly siege at a Sydney cafe.

Man Monis, an Iranian-born, self-styled cleric with a long criminal history, took 18 people hostage inside the cafe and demanded he be delivered an Islamic State flag. Monis and two hostages were killed.

The government review found no major faults with agencies that failed to detect Monis was a threat. But Abbott said Monis should never have been allowed into Australia, should not have been out on bail and should not have had a gun.