Abdul Numan Haider was killed on Tuesday after he stabbed two police officers outside a Melbourne police station, seriously injuring one he knifed in the head, neck and stomach.
The incident followed major terror raids in Sydney and Brisbane to foil an alleged plot by Islamic State jihadists to carry out "demonstration killings", including a beheading.
"I am deeply concerned about the threat that lone wolf terrorism poses to people," Abbott told Network Seven from New York where he is attending United Nations meetings.
Abbott's government raised the terror threat level in Australia to high earlier this month, and is also tightening counter-terror laws to give spy agencies greater powers, while cracking down on citizens who travel overseas to fight alongside IS jihadists.
The government says some 60 Australians are in Iraq and Syria to engage in unrest and has warned they could return home radicalised and prepared to commit attacks on home soil.
"I'm very concerned but I want to assure people that our police, our security and intelligence agencies are as professional as any in the world," Abbott said.
Australia has been a strong supporter of US efforts in Iraq, and is expected to join in international air strikes against IS fighters.
"People should go about their normal lives because what terrorists are trying to do is scare us out of being ourselves," Abbott added.
Amid fears that the heightened tensions could create a backlash against Australian Muslims, the defence force apologised today for any alarm caused by a claim that a 41-year-old officer had been attacked in Sydney while wearing his uniform.
The man has now withdrawn the allegation and police will investigate the circumstances surrounding the incident, the Australian Defence Force said.
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