The new measures include suspending and revoking citizenship for dual nationals involved in terrorism, and also stripping certain privileges of Australian citizens who break anti-terror laws.
"Those could include restricting the ability to leave, or return to, Australia... access to consular services overseas, as well as access to welfare payments," said Abbott.
"We will also clamp down on those organizations that incite religious or racial hatred."
He added that a new security czar will soon be appointed in the face of rising terror threats in the country.
Sydney siege report: A "system" failure
The announcement follows the release of first official report on the deadly siege in Sydney last December, which was made public Sunday.
During the incident, Australian police stormed the Sydney cafe where Man Haron Monis, a self-styled Muslim cleric had been holding hostages
. Authorities killed the gunman, but two of the 17 hostages held by Monis also died.
According to the report, 18 calls related to Monis were made to the National Security Hotline in the days leading up the attack.
The calls were complaints about the offensive nature of the content of the hostage taker's public Facebook page, but none suggested an imminent attack, said the report.
The review of the siege suggested no major failings of intelligence or process leading up to the siege, but instead revealed a failure of "the system," Abbot said.
"However, the inescapable conclusion is that the system as a whole let the community down. Monis was given the benefit of the doubt every time. He gamed the system," the prime minister said, referring to the existing legal frameworks relating to immigration, residency and citizenship.
'New dark age'
Officials said the security threat level has been building in the country over the last year, especially from radical Islamists.
"The terrorist threat is rising at home and abroad -- and it's becoming harder to combat," said Abbott in a statement.
"We have seen on our TV screens and in our newspapers the evidence of the new dark age that has 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."
Earlier this month, two men were charged with allegedly plotting knife attacks
for caliphate in Australia following a major counter-terrorism operation in Sydney.
The National Terrorist Threat level was lifted to "high"
last September, where it remains. It is the first time since the national alert system was introduced in 2003, and indicates authorities see a terrorist attack as "likely."