Australia will toughen its citizenship laws as part of a new anti-terrorism strategy to combat rising threats, PM Tony Abbott has announced.
He said citizenship for dual nationals involved in terrorism could be suspended or even revoked.
People born in Australia could also lose some privileges if they broke anti-terror laws, he added.
Officials have long warned that the country faces growing security threats, especially from radical Islamists.
They point out that dozens of Australian nationals are fighting for Islamic State (IS) militants in Iraq and Syria, and a number of them are believed to have returned to Australia.
On Sunday, Mr Abbott said "the system has let us down", following a report into the deadly Sydney cafe siege in December.
Two hostages were killed when self-styled cleric Man Haron Monis attacked the Lindt cafe on 15 December. The gunman was also killed when police stormed the cafe.
The report said Australia's security hotline had received 18 calls about Monis just before the siege - but none suggested an imminent attack.
'New dark age'
"It has long been the case that people who fight against Australia forfeit their citizenship," Mr Abbott said in a speech at the federal police headquarters in the capital, Canberra.
"So Australians who take up arms with terrorist groups, especially while Australian military personnel are engaged in Afghanistan and Iraq, have sided against our country. And should be treated accordingly," he said.
"We are examining suspending some of the privileges of citizenship for individuals involved in terrorism. These could include restricting the ability to leave or return to Australia, and access to consular services overseas, as well as access to welfare payments."
In his speech, the prime minister also said that a new security tsar would be appointed soon.
"The terrorist threat is rising, at home and abroad, and is becoming harder to combat.
"We've seen on our TV screens and in our newspapers the evidence of the new dark age that has now settled over much of Syria and Iraq. We have seen the beheadings, the mass executions, the crucifixions and the sexual slavery in the name of religion."
Mr Abbott said he would draw on the findings of a review commissioned by the government last August.
On Sunday, he warned that Australia would have to reconsider where the line was between individual freedoms and the safety of the community.
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