Australia wants to base counter-terrorism teams in Southeast Asia, including in Indonesia and the Philippines, the government said on Monday, as it laid out its security plan ahead of an October 9 general election.
Centre-left opposition Labour pledged to spend A$373 million ($260 million) to strengthen Australia's defence as the two parties argued over the best way to wage the war on terror.
Prime Minister John Howard, whose conservative government has edged ahead of Labour in opinion polls, said two teams of Australian police would fight terror at the source and stop it reaching Australia.
"We will not wait for a terrorist threat to eventuate before we take action," Howard told reporters.
He said the A$100 million plan would likely include Indonesia and the Philippines as bases for the two 10-man teams of police.
"If you are there and you are working in an increased way with the locals, you have a far greater capacity to bring about, or achieve, the prevention of a potential attack," Howard said.
The plan drew a lukewarm response from the Philippines, which said existing treaties meant the teams would not be able to go beyond intelligence gathering and technical expertise.
"I believe the agreement with Australia does not call for any joint operations. We will abide by our agreement," said Ignacio Bunye, a spokesman for Philippine President Gloria Macapagal Arroyo in Manila.
Additional teams would be based in Australia ready for rapid deployment based on intelligence reports or requests from police in neighbouring countries, Howard said in the northern city of Darwin, closer to Indonesia than to the capital, Canberra.
Australia has not been hit by a major terror attack on home soil but 88 Australians were among 202 people killed in night-club bombings on the Indonesian island of Bali in 2002 that were blamed on al Qaeda-linked Islamic militant group Jemaah Islamiah.
Howard also pledged to spend A$50 million turning the Royal Darwin Hospital, which treated more than 100 victims of the Bali bombings, into a national centre for critical care and trauma ready to cope with any further terror attacks in the region.
Labour leader Mark Latham said his party would strengthen Australia's defence through measures including a review of defence capabilities and increasing the size of the army by adding a light infantry battalion.
"(Southeast Asia is) a region where you can't take any risks when it comes to Australia's security. You need to recognise the importance of a co-operative approach," Latham said.
On Sunday, he said Labour would spend A$300 million to bolster maritime defence with a coastguard and sea marshals, and free the navy to fight security threats.
Australian police have worked closely with their Indonesian counterparts since the Bali bombings. Canberra also sent a team of bomb experts and other police to Jakarta after a deadly car bombing outside its embassy there 11 days ago.
Howard alarmed Australia's Asian neighbours, including Indonesia, in December 2002 when he said pre-emptive action in another country was a legitimate response to terrorism and he criticised Latham on Monday for not making the same promise.
Latham has vowed to bring Australia's 850 troops in and around Iraq back home by Christmas if Labour wins office, saying resources would be better used to fighting the war on terror in Australia's own backyard - Asia.
Howard is adamant Australia's troops will remain in Iraq.
Australia's booming economy, national security and the US-led war in Iraq have been the main election issues, with the environment, education and health also emerging as concerns.
The election has attracted international attention because it precedes the US presidential vote on November 2 and a British election, widely expected to be called in May or June. Both are set to be fought largely on security and the war in Iraq.