David Kilcullen, who was an advisor to the US military in Iraq, said those who thought the government could prevent an attack were in "dream land", and that terrorist activity was bound to happen on Australian soil, Xinhua reported.
"It is inevitable that we are going to see at least some time of terrorist attack on Australian soil. The question is how bad it will be, how we will respond and how we focus on recovery from that attack," Kilcullen said on Tuesday.
"We have to be realistic. If you think the government will protect you from any kind of terrorist attack, you're living in dream land."
Kilcullen said Islamic State (IS) was constantly encouraging disunity and hate within communities, something that could lead to more and more "lone wolf" terror attacks in countries outside Middle East war zone.
"The people we're dealing with, their specialisation is provoking conflict and trying to get different groups of people fighting each other," he said.
However, Australia's Justice Minister Michael Keenan refuted the claims and said the government was constantly evaluating and stopping threats before they turn into an attack on Australia.
"There have been terrorist attacks in Australia... but our agencies have stopped a further six, so we are very successful in stopping these things occurring in Australia but our response has been appropriate to the scale of the threat that we face here," Keenan said. (IANS)