Labor leader Bill Shorten says unity is vital as the international community deals with Islamic State extremists.

Opposition Leader Bill Shorten says social harmony will be put at risk if the fight against terrorism is sheeted home to the Muslim community.

“If Australia turns on itself, and if we turn on each other, terror wins,” he told the Labor caucus at a meeting in Canberra on Tuesday.

Mr Shorten also underlined the need for Labor to continue to stand up for jobs, a better deal for the unemployed and expanding the economy while the issue of national security dominated the public agenda.

“Australians are relying on Labor to stand with them against the threat of terrorism, to stand up for their jobs and their kids’ future – we can’t let them down,” he said.

The caucus formally approved legislation, which is before the Senate, to expand the powers of ASIO to tackle terrorism.

The approval came subject to a raft of amendments proposed by a bipartisan parliamentary committee and agreed to by the government, including ruling out the use of torture.

The caucus has yet to receive a second national security bill, which allows the foreign minister to declare terrorist hotspots as no-go areas.

Anyone travelling to such areas could face jail unless they have a valid reason for being there.

Mr Shorten also called on Prime Minister Tony Abbott to put youth unemployment and climate change on the agenda for the G20 leaders summit to be staged in Brisbane in November.

The government had shown a “poverty of vision” when it came to the G20, he said.