Sydney siege might have been 'preventable': Tony Abbott

The Prime Minister has ordered a "swift and thorough" review into how gunman Man Haron Monis was out on bail and not on ASIO's watchlist despite a history of crime and an "obvious infatuation with extremism".

"This has been a horrific wake-up call and yes the tragedy is that this has happened," the Prime Minister told radio station 2GB.

"Just like everyone else from the Premier down I was incredulous and exasperated at this, it was extraordinary that he was on our streets" he said.

Mr Abbott was also pressed by interviewer Ray Hadley about why the gunman was receiving welfare.

Mr Abbott said it was a "fair question" to ask how many migrants and refugees who had come to Australia had "sat on their arse" for 20 years but defended the "the vast majority of migrants," whom he said "work very hard and join Team Australia".

But he said a small number of migrants, as well as "born and bred Aussies" seek to "game the system" and should have the book thrown at them.

The review is due to be completed by the end of January and the Prime Minister says he intends to make it public. It will examine whether authorities should have made better use of boosted powers, including applying for a control order to restrict Monis' movements.

But Opposition Leader Bill Shorten backed the agencies as "excellent" on several occasions in an interview with the ABC.

"I have a lot of confidence in our security agencies and police," he said.

"A lot of Australians are wondering, 'Well, if that could happen then could it happen here?' There are crazy people out there but there are not very many of them and our police are, I feel, absolutely top notch," Mr Shorten said.

"How this fellow who would have been known to authorities, who was known to authorities, who had a track record of criminal behaviour, was clearly very, very, very deranged: Yeah I think it is important we have the inquiry," he said.