The operation is ongoing, but AFP Counter Terrorism and Special Investigations Assistant Commissioner Scott Lee said there was no threat to community safety.
“The community can be reassured that we’ve taken action at an early stage to ensure that there’s no risk to the public, and we’re confident that the action that we’ve taken today has mitigated that risk,” Mr Lee said.
Mr Hermans said the trio raised concerns due to “religious extremism”.
“It is Islamic, but let me make it very clear that we target the crime not the ideology,” he said.
Police say two of the men are from the same family.
Mr Hermans said the arrested men could face attempted terrorism or acts in preparation of terrorism charges, which can carry heavy penalties, including life in prison.
The 16-year-old was interviewed, released and was being provided with counselling services, Mr Hermans said.
“Victoria Police will continue to engage with this young man, offer him support and hopefully divert him away from the activity that’s come to our attention this morning,” he said.
Mr Lee said aspects of the fire in February made investigators suspect it was motivated by terrorism.
“There is an ideology, and a violent extremist ideology, that has caused us concern, and it’s as a result of that ideology that we’re looking at these incidents being connected to a terrorism motivation,” Mr Lee said.
“There are certain aspects to the lighting of the fire that led us to suspect it was a terrorism motivation.”
Mr Hermans said the age of those arrested was “very concerning”.
Mr Lee said the COVID-19 pandemic had seen a magnification of the online environment, both nationally and globally.
“What we’ve seen throughout the COVID period as people have come out of the physical world and been in isolation and driven into the online environment … that’s exacerbated some of the radicalisation that we’ve seen,” he said.
Professor Greg Barton, a counter-terrorism expert at Deakin University, confirmed that Victoria Police and other law enforcement agencies had experienced an increase in counter-terrorism case-loads during the COVID-19 lockdown, particularly in relation to far-right extremism and conspiracy theorists.
However, Professor Barton said there had also been a jump in online radicalisation by Islamic extremists.
“There’s a strong desire now there’s no more al-Qaeda attacks in big cities and the Islamic State thing has come and gone to think we can breathe easy,” he said.
“But the agencies are saying that their case-loads are going up and the amount of time they are spending on Islamic radicalisation is also increasing.”
In November last year, the United Nations expressed concerns about intensified terrorist activities during the pandemic and that violent extremist groups would seek to exploit the global disruption caused by COVID-19.
Separately on Wednesday, the head of the nation’s domestic spy agency, ASIO boss Mike Burgess, announced he will stop referring to “Islamic extremism” and “right-wing extremism”, saying his organisation needs to be conscious that the names and labels it uses are important.
He said his agency would now use the umbrella terms of “religiously motivated violent extremism” and “ideologically motivated extremism” in a significant change to the language it uses to talk about the threats facing the nation.
Director of the Forum of Australia’s Islamic Relations, Kuranda Seyit, who has worked in anti-radicalisation programs for Muslim youth, said it was premature to make any comments about the arrests but he was concerned authorities had identified the religious background of the offenders.
“I feel this is something that should be avoided, because crime has no religion,” Mr Seyit said.
“He shouldn’t have mentioned the person’s religion because nothing’s been ascertained as to their religious backgrounds or their religiosity.”
Police have encouraged anyone with information about extremist activity or possible threats to the community to come forward.
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David Estcourt is a court and general news reporter at The Age.
Senior Crime Reporter