Immigration Minister Peter Dutton says the NSW government should be applauded for its plan to build a prison to house hard core extremists and is encouraging other state leaders to come up with similar initiatives.
NSW Premier Gladys Berejiklian announced a $47 million package on Sunday to build a new 'mini-max' jail within Goulburn's SuperMax prison in the Southern Tablelands to house radicalised inmates as part of next week's budget.
"We don't what people within the prison environment indoctrinated, being converted into a radical form of Islam," Mr Dutton told reporters in Canberra on Sunday.
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"We don''t want these people coming out a bigger threat than when they went into jail."
Attorney-General George Brandis described the plan as a "good thing".
"So long as the way in which these prisons are designed and configured doesn't mean all the terrorists are together in each others company reinforcing each other's ideology," he told Sky News.
"I would suggest to my NSW counterparts a proposal like that has to work hand in glove with effective deradicalisation programs."
Labor frontbencher Ed Husic said policy makers had to take new approaches in response to the terrorism threat.
Mr Husic told Sky News that new ideas need to be "considered in a calm and rational way".