Ladies and gentleman, may I begin the acknowledgments this evening with the Premier's Dad.

Premier Mike Baird, thank you for your very gracious words. I certainly did make the right decision to launch your campaign all those years ago. I also want to acknowledge my Federal Parliamentary colleagues in George Brandis, Marise Payne, Phillip Ruddock, and I also want say thank you to Gerard and Anne Henderson for the extraordinary work you do at the Sydney Institute, you and your team. You are a premier think tank in this country and you lead public discourse and public debate and the battle of ideas with such style and it is such a significant institution I congratulate you on your 27 years and look forward to many more.

I thought this evening I should give you an update on two matters that have been certainly occupying my time over the last little while.

In relation to the tragic earthquake in Nepal we can now sadly confirm that one Australian has died at Mount Everest at the base camp. We fear there will be more but we have managed to account for 850 Australians, indeed I hope that figure will be up to 1000 by the time I go to bed tonight. Our thoughts are with the government and people of Nepal and the families who have lost loved ones. The official death toll is not yet known but I fear it will be well in excess of current estimates.

Secondly, before I begin my remarks tonight I would like you to spare a thought for the families of Mr Chan and Mr Sukumaran for I fear that on Wednesday morning they will be executed. I will continue to advocate for a stay of execution for as long as they are alive.

And only recently Mr Chan was ordained as a Christian priest and he has been providing support and spiritual nourishment for prisoners in the Indonesian jail system. Mr Sukumaran is now an accomplished artist, he has just completed a Fine Arts degree and he likewise is providing support to prisoners who are undergoing rehabilitation in the Indonesian jail system and as I pointed out on many occasions to my counterpart in Indonesia,

Indonesia has accomplished what penal systems around the world aspire to do and that is rehabilitate drug offenders.

I'm not asking the Indonesian Government to do anything other than it asks other countries in relation to Indonesian citizens who face death row overseas including for serious drug offences.

So we spare a thought for the families and the two individuals, Mr Sukumaran and Mr Chan.

Ladies and gentlemen, last Saturday as tens of thousands of Australians gathered at ANZAC Day services held across the globe I was at Ypres in Belgium, the scene of our greatest World War I victory.

It was there in September of 1917 that our troops helped turn the tide of war.

That victory came at a terrible cost, 13,000 Australians were killed in Belgium.

The sheer scale of our commitment to the liberation of Europe is staggering by any measure - a young nation barely 14 years from Federation; from a total population of under 5 million and just 2.5 million men - 420,000 men enlisted, 300,000 served on the Western Front, with 60,000 casualties.

In today's terms it would be equivalent to almost 20% of our total male population, or almost 2 million men enlisting to serve in a conflict a world away from home.

Australia's horrific toll was matched or exceeded by many of the 50 nations embroiled in what was to be the War to End All Wars.

It was not. For just 20 years later the world was again plunged into a second and even greater war. Another generation lost - silent witnesses to the devastation of war. Almost 40,000 Australians killed among the toll of more than 60 million casualties worldwide.

This time the war in the Pacific, with the bombing of northern Australia, brought the conflict to our shores.

This war ended with the destruction of much of Europe and the detonation of two nuclear bombs over Japan.

This time there was a universal determination to establish safeguards to prevent the recurrence of conflict on a scale that could threaten the very foundations of a civilised world.

A new international framework was clearly required to ensure the world never again engaged in conflict on such a scale - a new global order upon which humanity could rely to ensure enduring global peace and development.

The United Nations was born, with a Security Council charged with the responsibility for safeguarding global peace and maintaining global security.

In reality the United States in terms of the sheer scale of its military might has been the principal guarantor and defender of world order.

While the shortcomings of the UN and its Security Council are well documented - particularly in terms of the Permanent Five protecting their interests through the use of their veto power - it has played a significant role in preventing global conflict.

There has been no World War III.

Tonight I will address what I see as the most significant threat to the global rules based order to emerge in the past 70 years - and included in my considerations is the rise of communism and the Cold War.

This threat is a form of terrorism - more dangerous, more complex, more global than we have witnessed before - a pernicious force that could, if left unchecked, wield great global power that would threaten the very existence of nation states.

This is not a threat that is confined to the battlefields of Europe, the Pacific or a nuclear stand-off with Russia.

Through traditional and non-traditional means, this form of terrorism has combined the most medieval of constructs with a sophisticated use of technology in a way that challenges the very foundations of nations.

Australia is not immune.

The Westphalian system that divides the world into various types of national governments, operating within sovereign borders, is almost 400 years old.

Notwithstanding the transformations - scientific, technological, industrial and social - and the change within the governance of nations that have taken place - this system has persisted.

It has been modified through social evolution, political revolution, international laws and global organisations yet many of the basic elements of the system of nation states are unchanged. 

It is the vehicle of the nation state through which countries give expression to their values and organise to defend them, where necessary.

With all its flaws - and some nations embrace systems and values and strategies that many find shockingly flawed - it is the international system of nation states that has enabled us to improve greatly the circumstances of much of humanity.

Indeed it has been the foundation of humanity's efforts to build peaceful, safe and prosperous societies.

There have always been challenges to the system of the nation state - despots who covet neighbouring lands, authoritarian regimes and subversive political movements.

Globalisation is a force that both reinforces, and undermines, the nation state.

However the digital revolution and the mobilisation of goods and labour and capital across borders have brought unprecedented levels of prosperity to vast parts of the world.

Multinational corporations for example, long the indispensable engines of our global economy, can now rival nations in terms of sheer economic power.

If you ranked the top 100 countries and companies by GDP and revenue, 34 of the largest global economic entities are corporations.

However, it is the emergence of malevolent non-state actors that is increasingly challenging governments around the world.

Organisations that hold no respect for any government, sovereign state, boundary, or law - transnational drug cartels, people trafficking syndicates and illicit arms dealers all challenge that primary role of governments to defend their borders and keep their nations secure.

In the last decade or so we have witnessed a significant increase in global terrorism.

But over the past two years we have seen the emergence of a terrorist organisation, backed by an ideology the likes of which we have not seen since the Second World War - an organisation that is building increasingly sophisticated transnational networks that would rival a multinational corporation; utilising the latest in  technology and weapons that would otherwise be the preserve of governments; and embracing the power of social media with all the dexterity and understanding of an enterprising entrepreneur.

This new and virulent form of terrorism is a real threat to the international rules based order and the system of the nation-state. 

For the purposes of my analysis this evening I will start with the aftermath of September 11.

The Al Qaeda terrorists inspired by Osama bin Laden sought to destroy the economic foundations of the international order with its attacks on the twin towers of the World Trade Centre in New York in 2001.

The global economy proved more resilient than Osama Bin Laden had assumed, however he did not resile from his ambitions.

Thwarted through Coalition action in Afghanistan, Al Qaeda affiliates sprang up elsewhere:

  • the al Nusra Front in Syria, which includes the feared The Khorasan group;
  • al Qaeda on the Arab Peninsula in Yemen;
  • al Qaeda in the Islamic Maghreb in northern Africa;
  • and al Qaeda in Iraq.

These groups found and filled vacuums of power and attracted followers, inspired by a promise of profiting from anarchy.

Bloodthirsty campaigns of terror began in Somalia, Nigeria and other parts of Northern and Central Africa.

The Arab Spring for all its potential as an example of grass roots democracy movements rising up against authoritarian regimes, in fact left behind chaos and instability - creating a breeding ground for terrorist cells.

One of the most brutal was Al Qaeda in Iraq under the ruthless leadership of Abu Musab al-Zarqawi, who was among the first to use beheadings as a tool of terror.

The United States surge of 2007 in Iraq supported by the awakening councils of Sunni tribal leaders, repulsed by the tactics of Zarqawi, succeeded in restricting the operations of this organisation.

However Al Qaeda in Iraq found greater room to operate in Syria where there was a clash between the authoritarian Assad regime and opposition groups seeking to overthrow it.

Seizing the opportunity that the internal conflict in Syria created, Al Qaeda in Iraq gained a new leader, Abu Bakr al-Baghdadi.

Baghdadi renamed the organisation the Islamic State of Iraq and Levant (ISIL) and set about conquering territory in Syria.

Baghdadi and ISIL's tactics were brutal and effective, with a harsh implementation of Sharia law supported by a complex web of spies that has been compared to the infamous Stasi secret police of East Germany's communist rulers.

ISIL targeted economic assets including oil fields selling oil on the black market to provide a source of income.

It supplemented this income by looting banks, extortion from kidnappings, people trafficking and the black market in cultural icons and antiquities robbed from museums and mosques.

With Syrian President Assad fighting various opposition forces, and ISIL fighting with, and against, both sides - the stakes were increased exponentially in late June last year when ISIL swept out of Syria and back into Iraq, with columns of fighters in tanks and armoured vehicles under its black flag, claiming towns and cities with frightening ease.

Al-Baghdadi stood in the Mosul mosque and declared an Islamic Caliphate - a medieval fiefdom that is a platform for further territorial conquest.

He renamed his organisation the Islamic State.

Other nations in the Middle East refer to it as Da'esh in repudiation of its grandiose claims to be an Islamic State.

This had a profound impact on other extremist groups, who realised they could aspire to much more than campaigns of bombings and other terrorist attacks.

Boko Haram for example has now declared a caliphate over a large swathe of northern Nigeria claiming control over the population.

This declaration by Da'esh of a caliphate was what many Arab and Iranian leaders - both Sunni and Shia feared. As it has been explained to me, these terrorist groups are Takfiri in nature.

Takfiris are Muslims who accuse other Muslims of apostasy - being unbelievers.

Indeed anyone who does not embrace their narrow and extremist view of Islam is an enemy to be destroyed - Sunni or Shia Muslims, Christians, Jews, Hindus, Buddhists - all other religions, in fact anyone who is not signed up to their fanaticism is an affront to their beliefs and must be eliminated by any means possible.

Da'esh has instructed its followers to spread terror throughout the world, to kill indiscriminately using weapons including rocks, knives, guns and motor vehicles on any infidel, anywhere, at any time.

This instruction was followed in the attack on the Canadian Parliament, the attack on police in Melbourne and in the plans held by others in Australia, before being thwarted by our police.

Over the past 18 months in my discussions with numerous senior leaders and officials in the Middle East and Europe, many have expressed the fear that we are facing a generational struggle against Da'esh and likeminded extremists and the ideology that drives them.

Iran's President Rouhani described Da'esh as a cancer that could metastasise across northern and central Africa, Middle East, Afghanistan, Pakistan and into South East Asia.

There is already evidence that Da'esh is building networks with the extremist elements of the Taliban in Afghanistan, to spread its influence and destabilise the efforts at nation building under the newly elected government of President Ghani.

Former Secretary of State Henry Kissinger wrote recently in his book World Order that:

"Zones of non-governance or jihad now stretch across the Muslim world... a significant portion of the world's territory and population is on the verge of effectively falling out of the international state system altogether".

Da'esh seeks to drag the world back to the Dark Ages in its preferred form of brutality and violence, crucifixions, beheadings and mass executions.

It kills with impunity and glorifies the murder in the online world as part of its recruitment efforts. According to some, Da'esh has killed more Sunnis than Shias -

Christians have been executed in Libya.

Minorities in Iraq and Syria brutalised, including the appalling abduction of hundreds of Yazidi women and girls.

A Jordanian pilot was tortured and burnt alive.

Palestinian refugee camps have come under attack in Syria.

English aid workers. Journalists.

As it was put to me last week, Da'esh is an equal opportunity murderer.

Tehran warns that Da'esh must be prevented from capturing the cities of Damascus and Baghdad - for these were the capitals of the ancient caliphates of centuries ago.

Should the ideologues and intellectuals within Da'esh, and there are some at the leadership level, be able to claim either city as the centre of its self-declared caliphate, this would represent a powerful rallying call to extremist Sunni Muslims, and attract potentially greater numbers of fighters to the cause.

This is particularly concerning due to Da'esh's highly developed use of technology to attract a Muslim, largely Sunni, following through the use of prophecy relating to the apocalyptic End Times.

This is a threat to Australia because Da'esh is recruiting in our country, reaching into the homes of our citizens, radicalising our young people online.

Our present understanding is that around 100 Australian citizens are currently in Iraq and Syria fighting with Da'esh.

We have witnessed the first Australian suicide bombers in Iraq and Syria, while a number of Australians are taking leadership roles within Da'esh and al-Nusra.

It can be tempting to dismiss Da'esh as only targeting criminals and those with a history of mental illness, drug abuse or poverty.

That is true, however they are also preying on young men and women from middle income families who have been well educated and have no background of social isolation or disadvantage or religious extremism.

Our intelligence agencies know of at least 100 Australian citizens in this country now who are actively supporting Da'esh.

I struggle to comprehend, let alone explain, why young Australians would be motivated to travel to Iraq and Syria to join an organisation notoriously vicious in the degrading treatment of its recruits.

Young women in particular, who have joined Da'esh, have been exploited in the most appalling way - forced into abusive marriages, used as sexual slaves.

Da'esh has published instructions on the treatment of sexual slaves that encourages raping and beating women.

Women are now being used as part of their control apparatus, with an all-female militia known as the Al Khansaa brigade which detains and punishes other women who don't follow the medieval implementation of Sharia law.

In an unspeakable act of treachery to other women, this all female brigade reportedly operates brothels, where non-Muslim women and girls are raped by Da'esh fighters.

At least 20 Australians have been killed supporting Da'esh and around 30 have returned to Australia.

In attempting to shed some light on what attracts Australians to such an extreme ideology I was urged to read a book written more than 60 years ago - Eric Hoffer's seminal work "The True Believer: the thoughts on the nature of mass movement."

Hoffer was mostly concerned with the destructive potential of fascism and communism although he believed the same forces underpinned the psychology of all mass movements, including religions and institutionalised racism.

He argued that people who are frustrated with their lives and who can see no hope in the face of what they perceive as inevitable failure are prime candidates for recruitment as fanatical followers.

They are attracted by the total surrender of oneself to a greater cause where others take responsibility for the decisions that determine whether or not their lives are successful.

Hoffer's work offers a grim insight into the lure that terrorist movements like Da'esh seem to have where people are willing to sacrifice their lives in support of an ideology.

He observed that dying and killing seem easier when they are part of a ritual, ceremonial, dramatic performance or game.

And of course we are reminded of the highly ritualised beheadings staged by Da'esh, captured and widely published on social media, which are designed to horrify and repulse the majority of people, yet presumably also appeal to the subconscious of individuals vulnerable to that message.

Hoffer said: "a proselytizing mass movement must break down all existing group ties if it is to win a significant following. The ideal potential convert is the individual who stands alone..."

Hence the lone wolf attacks in Ottawa, Martin Place, London and Belgium.

Da'esh seeks to target susceptible individuals to convince them that the apocalyptic battle it offers is more important than family and community, safety and security, and that it trumps any existing ethical or religious beliefs.

Da'esh seeks to divide our families and communities, grooming their young targets to not talk to parents or friends and not reveal their radicalisation before they leave home to travel to the Middle East.

We are seeing the refined targeting of individuals from across the socio-economic spectrum who have lost faith in their lives and see their world as being irredeemably corrupt or unfair.

An Australian-trained doctor who has worked in Queensland, South Australia and Western Australia, is the latest face for a Da'esh propaganda video.

Colleagues claim to remember him as a hard drinker, with a reputation as a sexual predator.

In some ways, the perfect recruit for Da'esh, but for the urbane face now presented to the world on behalf of his new masters.

It is also an appeal to the naïve idealism of youth, who seek a world without compromise.

Da'esh seeks to destroy any cultural belief system that competes with its violent narrative - ransacking and destroying ancient sculptures and artefacts, burning priceless manuscripts that would reveal the real and extraordinary history of the Middle East.

Respected academic Sidney Jones from the Jakarta-based Institute for Policy Analysis of Conflict - an expert on terrorism, particularly in the Indonesian context - identifies five main motivations behind foreign terrorist fighters joining Da'esh:

A desire to take part in the final battle of the Islamic apocalypse (the battle between infidels and Muslims preceding the Day of Judgement);

A desire to help Muslims under attack;

A desire to take part in jihad;

A desire to benefit from what she calls the "5 star jihad" - for Da'esh is providing fighters and their families with money, accommodation, food, health care, education;

A desire to be part of the Caliphate and the great Islamic experiment of living under an ancient interpretation of Sharia law, deemed by followers as "pure".

Da'esh must be stopped. There must be an international response to Da'esh to prevent a more rapid spread of its ideology and its attraction to people from across the world.

To truly defeat Da'esh is to challenge and repudiate its ideology, in addition to the military response that is needed to interrupt its current activities in Syria and Iraq.

Australia has joined with around 30 other nations to provide support to the Iraqi government that is determined to disrupt, deter and ultimately defeat Da'esh, and take back its territory and protect its citizens.

The fight against Da'esh is in some ways easier than against al-Qaeda for example, because of its desire to control territory and populations.

This makes Da'esh more vulnerable to being undermined militarily, financially and from within.

To ensure the population under its control does not rise up against it, Da'esh must provide adequate services including food, water, employment, healthcare and a form of education.

As those in government would understand, this requires a large diversion of resources, in this case away from the conflict and military force.

Forbes magazine estimates that Da'esh already boasts an annual income over $2 billion.

It will be challenging to defeat Da'esh militarily; however the more difficult task will be to defeat the ideology behind Da'esh which it largely shares with al-Qaeda and other extremist organisations.

This is a security threat that is being confronted by countries across the world.

More than 90 countries claim to have citizens fighting with Da'esh in the Middle East.

There are an increasing number of countries which have a profound fear of what Da'esh is capable of achieving and have also concluded that it must be stopped.

In fact there is a surprising consensus among otherwise ideological or geo-political rivals, as to the capacity of Da'esh to challenge the foundations of the post-World War II global order.

This was never more evident to me than last week - as I met with the leaders of Iran to discuss our common interest in building the capacity of the Iraqi Government to drive Da'esh from its lands and re-establish governance over its territory.

There are many moving parts in the Middle East at present and policy makers are struggling to make sense of what will be required in terms of the joint response to this challenge.

Facing a common enemy and threat, long-standing bitter foes are reaching out to each other to see whether consensus can be reached on how to defeat this ideology.

Much work remains to be done in terms of achieving unity, particularly among the nations of the Middle East, however all recognise the threat they collectively face.

Each nation must respond to the challenge of Da'esh domestically, regionally and globally.

This involves working through large institutions such as the United Nations and through changes to legal frameworks and coordination of the effort to disrupt the flow of funds, weapons and fighters to Da'esh.

Australia has taken a number of steps to strengthen our response and I pay tribute to the Honourable the Attorney-General, Senator George Brandis, who is here tonight, for leading the charge.

We have passed laws to compel communications companies to retain metadata to provide our law enforcement and intelligence agencies with a vital tool in tracking networks of those who would engage in terrorist acts or support them.

We have increased the powers of our intelligence agencies and provided greater financial resources to the effort of identifying and countering threats of violent extremism.

I have cancelled around 100 Australian passports - stopping Australians from travelling to conflict zones and becoming experienced terrorists.

This also prevents the building of networks among others who have already fought and are seeking to return home to pose an increased threat to our communities.

I have also declared al-Raqqa province in Syria and Mosul in Iraq as off limits to Australians - it is an offence for any Australian to travel to these regions without a legitimate purpose. The government has also implemented new offences for advocating terrorism. 

In Australia, we are working with Muslim communities, with families, with non-government organisations to counter radical extremism from taking hold in our towns and cities, we are working with state governments, local governments.

Our security agencies are coordinating with others globally and with the private sector to take down material posted by Da'esh - this is no small undertaking with an estimated 100,000 twitter messages posted by Da'esh or on its behalf every 24 hours, while videos and other material are also being uploaded constantly.

It is inevitable that as nations legislate and seek to control the security environment, the more this impinges on the very freedoms for which our citizens have fought and died to uphold and defend.

In Australia, we have taken these steps that, to a degree, impinge upon some of our individual freedoms, steps that are inherently controversial in a liberal democracy - not because it is our objective to limit the freedoms of our citizens.

Far from it - as liberals, as democrats, we believe deeply in the liberties of ordinary Australians.

The right to free speech.

The right to freedom of movement, of association, and of religion.

The right to privacy.

These values are strengths of our society - and also internationally, in the prosecution of our foreign policy.

It's a debate that others are struggling with.

Last week in Paris I met with the staff of Charlie Hebdo - the irreverent satirical magazine that lampoons politicians, religious leaders and indeed anyone that comes to their attention.

Satire has been part of French culture for centuries - it is as French as the rallying cry of the revolution - liberty, equality, fraternity - satire.

French legislators have responded to the shocking attack on the staff of Charlie Hebdo by drafting laws that would otherwise have been strongly resisted in their fiercely liberal democracy.

In Victorian England, John Stuart Mill made his name by describing the boundaries of liberty.

In a century of dramatic social upheaval - a roiling scene of competing nationalisms and ideologies which laid the seeds of 20th Century totalitarianism - Mill was deeply concerned with the border between state power and human freedom.

"The sole end for which mankind are warranted, individually or collectively, in interfering with the liberty of action of any of their number, is self-protection," he wrote in his famous essay, On Liberty.

But when that litmus test turned positive - when self-protection was at risk - Mill saw state intervention as entirely legitimate.

"As soon as any part of a person's conduct affects prejudicially the interests of others, society has jurisdiction over it, and the question whether the general welfare will or will not be promoted by interfering with it, becomes open to discussion."

In our time - a century and a half after Mill wrote his seminal text - Australia, like governments around the world, face a critical national security challenge.

The challenge for governments and indeed all of us is the question of what freedoms and levels of privacy are we prepared to sacrifice to achieve security for our society at large?

At what point do the laws become draconian and too invasive?

There are no easy answers to these questions, particularly during times of great security challenges.

Citizens demand of their governments that terrorists be prevented from launching attacks.

The key to these questions is to ensure that the powers handed to our police and security agencies are balanced with appropriate levels of oversight and review.

Agencies need sufficient flexibility to enable rapid responses to fast evolving threats, but not to the extent that the laws can be abused and used for unintended purposes.

In a meeting last week with the French National Intelligence Coordinator and the heads of the French intelligence community - one of the more sobering meetings I have held since becoming Foreign Minister - they said the terror threat in France had increased post the Charlie Hebdo attacks and that it was only a matter of time before the next attack occurred.

Each nation is responding in its own way to these threats, and Australia has acted in a way that we believe is proportionate and appropriate with the threat.

Ladies and gentlemen - John Stuart Mill gave us an intellectual heritage, setting down markers that - 150 years on - we can still use to chart our course.

Mill did not live in the age of ubiquitous digital communication that so defines our time, however his principles are undiminished.

This is the foundation of our democracy and also of our foreign policy as we continue our endless work towards a better world.

Osama Bin Laden underestimated the resilience of the global economy to his attacks on the World Trade Centre, and I suspect Da'esh greatly underestimates the resilience of the nation states aligned against it.

Those who lived through the horrors of the two World Wars must have wondered how humankind could ever rebuild civilized societies after the unleashing of so much destruction and death.

We live in times where we are being confronted by a new savagery and ideology.

There will be many difficult days in coming years, as the French put it to me "things are going to get worse before they get better". But we will overcome this current threat, the nation state will survive, and human decency will triumph.

The principle of resisting oppression is what inspired our young men to enlist and fight in faraway lands during the First World War so many years ago.

Our generation has inherited the benefits of their sacrifice and we are thus the custodians of their legacy, forged in blood on the shores of Gallipoli and the fields of Flanders.

We must prevail.

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