The announcement came a day after the New Zealand's inquiry about Christchurch incident, the massacre of 51 Muslim worshippers by an Australian white supremacist gunman
Australia on Wednesday ordered an inquiry into combating violent extremism, after a concerted push for the government to ensure it is equipped to face a growing threat from the far-right.
The country's powerful parliamentary intelligence and security committee announced it will examine the spread of radical movements and the threat they pose to Australians.
Conservative Home Affairs Minister Peter Dutton prevented the probe from focusing solely on emerging far-right terror, ordering it to instead broaden its focus to include Islamist groups.
The announcement came a day after a New Zealand inquiry into the massacre of 51 Muslim worshippers in Christchurch by an Australian white supremacist gunman called for sweeping changes to counter-terrorism operations.
Spy agencies had placed an "inappropriate" focus on Islamist extremism before the attack without giving due weight to the threat from right-wing terrorism, the report found.
Australia's opposition home affairs spokeswoman Kristina Keneally, who pushed for the inquiry, said Canberra already had "a full suite of counter-terrorism tools" in place to meet the threat from radical Islam.
But a review was needed "to determine if they are fit for purpose amid the threat of right-wing extremism," she said.
In recent years, Australia has seen an increasing threat from the far-right. Top intelligence officials said in September that white supremacist extremism now accounted for 40% of their caseload, up from 15% in 2016.
On Wednesday, police arrested an 18-year-old Australian who had been researching bomb-making and accessing "neo-Nazi, white supremacist and anti-Semitic material" online.
Counter-terrorism law enforcement officers said they had raided the man's home after an "escalation" in his "extreme right-wing" posts online that allegedly expressed support for an "mass casualty event."
He is expected to be charged with urging violence against others and advocating terrorism.