People inside the Lindt cafe hold up the black Shahada flag of the extremist group Jabhat al-Nusra, which is fighting the Assad Government in Syria. Photo / Channel 7
The MP who chaired the anti-terrorist legislation rushed through Parliament last week, Mark Mitchell, says the bill was "100 per cent" justified.
And he said he had had messages yesterday thanking him for the bill in light of the Sydney hostage crisis.
"It becomes a lot more real for people when it's three hours across the ditch."
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Labour leader Andrew Little, who also supported the new powers, said the sorts of risks the law dealt with "are real".
Mr Mitchell, a former security specialist who ran a company in the Middle East for 10 years, said New Zealand was not immune.
"We don't have some sort of magic inoculation that means we couldn't be exposed to some sort of extremist actions here."
It was not known last night whether any New Zealanders were involved in the Lindt cafe siege in the Sydney CBD.
Prime Minister John Key texted a message of support to Australian Prime Minister Tony Abbott soon after the siege began and said last night that New Zealand authorities would stay in close contact with Australia as events unfolded.
Mr Mitchell said one thing he had learned after dealing with terrorists' acts for a decade was that they had become good at adapting and changing tactics to defeat measures taken by countries to mitigate risk.
"You do have to be quite flexible and be able to move quickly and take all the measures we need to prevent that from happening."
The bill followed advice from New Zealand security agencies about Isis (Islamic State) recruiting foreign supporters through social media.
Isis enlists recruits to undertake local acts of terrorism or join its ranks in Syria or Iraq, where it has engaged in mass killings and some beheadings in its bid to set up a caliphate, a state ruled by a single leader under Islamic law.
Passed with the support of Labour, the legislation gave the Security Intelligence Service extra powers including warrantless surveillance for 24 hours and the ability to cancel passports for up to three years.
Mr Little said last night that it was not yet known whether the Sydney crisis involved somebody connected to a network, or was a lone person or whether it was someone with mental health issues. "But the reality is that the sort of risks that the legislation is designed to deal with are real.
"Even though Australia's security assessment is higher than ours, nevertheless the world is not a benign place even down this end of the globe and we shouldn't assume that it is."
Mr Abbott has called Isis a "death cult" and has engaged in air strikes in Iraq and committed 200 special forces to help Iraq train its forces. He has also invited New Zealand to assist as an Anzac unit.
Mr Key has said New Zealand is willing to send regular troops to help train Iraqi soldiers so long as it is on a protected base. No decisions will be made until next year - the first Cabinet meeting is on January 27.
The Ministry of Foreign Affairs and Trade said yesterday it was unknown whether any Kiwis were involved in the siege.
A spokeswoman said New Zealanders in central Sydney were asked to follow the advice of local authorities and keep their family in New Zealand informed.
The travel advisory to Australia is unchanged but the SafeTravel website has an item on the hostage situation. The travel advisory alerts readers to the fact that Australia's national terrorism public alert system is on high - meaning a terrorist attack is likely.
The incident was reported about 7.30pm.