Where terrorism has its deadliest impact on a society is when it comes as a shock. September 11, 2001 was an audacious attack—for most people in the community, a horror previously unimagined. The 2002 Bali bombing dispelled widespread assumptions about the moderate character of Indonesian Islam. And the ‘home-grown’ attacks of July 2005 in London similarly challenged public confidence that a British born Muslim would turn upon their own.

This leaves national security officials in a race to imagine the next shift in security threat, within comfortable bureaucratic structures that often fail to match the creativity of harried terrorist networks.

But what happens if, over an extended period of time, terrorists fail to deliver society a shock? Do people become complacent, and as a result, begin to question the cost and inconvenience of so-called protective measures? And could public complacency, in turn, give terrorists an opportunity to strike?

It has been a boom time for the national security industry over the past few years. Australia's spending in the area is estimated by ASPI to top $1 billion annually. But this money has flowed during an extended run of economic expansion. Now, with widespread worry about an economic downturn, the government will no doubt look to make cuts and find new efficiencies. Circular arguments about the need to be ever watchful cannot be allowed to replace an honest risk assessment. A debate is already brewing about the relative threat terrorism poses as compared with traditional strategic concerns (nuclear weapons proliferation for instance).

The security measures at the Sydney APEC summit last September gave a dramatic illustration of the potential for over-reaction—the central business district of Australia's largest city, locked down and flooded with police. Clearly, any gathering of world leaders needs heavy protection and not only from potential terrorist attacks. But the operation did not appear to match the threat, at least because authorities made little effort after the event to publicly explain why such measures were needed. People (read taxpayers) will quickly lose faith with apparently self-serving claims to ‘confidentiality’.

Beyond the dollars spent, there are wider costs associated with the reaction to terrorism. Understanding the region becomes more difficult if viewed principally through the prism of Islamist terrorism. In the reverse, the perception of Australia as a place where Muslims are viewed with suspicion makes public diplomacy all the more difficult.

This makes an open, robust and realistic assessment of the terrorist threat all the more necessary, and a process that might help limit the shock of the next attack.