Australia’s military will be given the full authority to target all terrorists, removing a number of legal blockages.

A 400-member Australian Defence Force air traffic group is conducting air strikes over the Islamic State group’s strongholds in Iraq and Syria and a similar number of ADF personnel are training and assisting Iraqi ground forces.

However, when Malcolm Turnbull visited Iraq in January the chief of the defence force Mark Binskin advised him of a legal anomaly which meant the ADF was not empowered to be as effective as it could be.

He was told the ADF’s targeting base in Iraq and Syria was restricted, and could not operate as freely as Australia’s coalition partners.

The prime minister told parliament on Thursday the government would change the commonwealth criminal code to bring domestic laws in line with international law.

“This means that ADF personnel will be supported by our domestic laws,” Mr Turnbull said.

“They will be able to target Daesh (IS) at its core – joining with our coalition partners to target and kill a broader range of Daesh combatants – which is consistent with international law.”

It was a “reasonable and conventional approach” adopted by the armed forces of Australia’s key allies across the world.

Mr Turnbull said Australians could not pretend that IS-related terrorism was “merely a distant problem”.

Prime Minister Malcolm Turnbull delivers a statement on National Security. Photo: AAP

“Daesh is the most immediate security challenge that directly affects us all – our military and police, our communities, our youth and it is therefore my focus today,” he said.

The first objective should be to expel IS from its occupied territories and destroy “all of its pretensions to statehood”.

Mr Turnbull also said the tide had turned in the Middle East fight against IS.

“Far from sweeping across Europe to stable their horses in the Vatican, Daesh is now on the defensive, losing territory, resources and lives.”

When Mosul and Raqqa were liberated, the coalition against it could start talking about the final destruction of IS’s so-called caliphate.

In the past year, 40 Islamist terrorist attacks against western targets resulted in over 700 deaths, many of which were inspired by IS.

A Royal Australian Air Force F/A-18F Super Hornet aircraft stops in its hanger after a mission in the Middle East. Photo: AAP

There were also many casualties in attacks against Muslims in Africa and Middle East.

Air Chief Marshal Binskin said there was the possibility within existing law “where a domestic court may take a narrower interpretation of Australia’s obligations under international law and potentially prosecute an ADF member”.

Opposition Leader Bill Shorten, who was briefed on the decision on Thursday, said Labor would take a “constructive approach”.

“The principle of targeting all members of Daesh is a sound principle and of course we will need to see how the law and the drafting works,” he told parliament.

While the ADF was able to target “Mad Max style vehicles” used by terrorists in Iraq, as well as infrastructure and headquarter positions, there was legal ambiguity when it came to “the factories where they make this equipment, where they cache their supplies, where they get the fuel trucks and the logistical element”.

“It is important that we … make sure that our ADF, by some quirk of domestic law anomaly, should not be subjected to legal repercussions merely because we didn’t deal with the issue and update our laws,” Mr Shorten said.