Security challenges remain 17 years after the September 11 terrorism attacks, with foreign fighters returning to Australia, the government says.
Defence Minister Christopher Pyne said there are still "great challenges" which was why the government was investing $200 billion to heighten military capability and security, including $5 billion on combat vehicles.
"As the saying goes, the price of liberty is eternal vigilance," he told parliament on Tuesday.
Home Affairs Minister Peter Dutton said there were more than 200 people under investigation for supporting terrorism or seeking to fight in Syria and Iraq.
"We know the threat hasn't gone away and will not," Mr Dutton told parliament.
"We are worried about returning foreign fighters."