'Terrorism is also happening in the US and Europe. Is that a breeding ground (for terrorists)?,' he asked reporters at the end of his five-day working visit to Australia.

'We have been very effective in taking preventive measures,' he added.

Muhyiddin said Kuala Lumpur had always worked closely with Jakarta in tackling the terrorism menace.

On concerns by Canberra that Malaysia was being used as a transit point to smuggle people from other countries into Australia, Muhyiddin said the problem was being addressed.

'We are (also) concerned. We don't want to be labelled as a transit point. We will take stern measures to manage the situation,' Bernama, the official news agency, quoted him as saying.