Foreign Minister Julie Bishop believes Arab states can be trusted to crack down on wealthy citizens funding terror groups including Islamic State.
Ms Bishop has had talks with Arab leaders in New York and says they’re committed to co-operating with the Iraq government to fight IS extremists.
“There is universal condemnation of ISIL,” she told ABC Radio.
The funding of terrorism and practice of kidnappings for ransom will be the focus of a global counterterrorism forum on Wednesday.
“It needs a commitment from all countries to starve ISIL of funds,” Ms Bishop said.
Private citizens in Saudi Arabia and Qatar have been giving IS funding.
But Ms Bishop said the Middle East leaders were acknowledging a clamp down on terror financing was a priority.
“This time they see ISIL as a real threat,” she said.
“ISIL is not discriminating… it will kill anyone in its wake.”
Islamic State extremists urged supporters to directly target Australians in a message released on Monday.
Liberal MP Dan Tehan, who chairs the intelligence and security parliamentary committee, wasn’t surprised by the statement.
“It is a dreadful organisation,” he told ABC radio.
His committee oversees the administration and expenditure of Australia’s spy agencies while the inspector general examines operational matters.
Mr Tehan believes that balance of accountability measures is right.