An 18-year-old man has been shot dead by counter-terrorism police and two policemen have been stabbed in Melbourne's outer south-east.
The Coalition is divided over engagement with the Islamic community as Communications Minister Malcolm Turnbull warned attacks on Australian Muslims play into the hands of terrorists, while a second government MP joined the push to ban the burqa and sharia law.
Julia Gillard has directly accused Kevin Rudd of sabotage and blackmail, but expressed anguish over her own role in toppling Kim Beazley.
Spy agency ASIO will be given the power to monitor the entire Australian internet and journalists' ability to write about national security will be curtailed when new legislation – expected to pass in the Senate as early as Wednesday – becomes law, academics, lawyers, the Greens party and rights groups fear.
Australia's most senior soldier, Chief of Army Lieutenant General David Morrison, has warned the fight against the Islamic State may be part of one "long war" that lasts for decades into the future.
Local shares poised for a soft start to the day on the back of a weak lead from international markets.
One man has been shot dead by counter-terrorism police and two policemen have been stabbed in Melbourne's outer south-east.
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Australians are self-funding more and more of their own health costs, with growth in spending from state and federal governments at a record low.