By Tess Ikonomou and Grace Crivellaro in Canberra

A bid to ban extremist groups following the Bondi massacre is already working, a Labor MP says, as Australia’s most prominent neo-Nazi groups announced they will disband.

Draft laws to be debated next week in parliament when it returns early would introduce a framework to outlaw hate groups that fall below a threshold to designate them a terrorist organisation.

Organisers, supporters and recruiters of listed groups face up to 15 years in jail and members will face seven years behind bars.

Josh Burns, a Jewish Labor MP, said it was a “fundamentally good thing” the Nationalist Social Network said they would disband after the draft legislation was released on Tuesday.

However, he said they will continue to be surveilled.

“We will make sure that their track record of promoting hate and promoting their hate-filled ideology is continued to be monitored,” he told ABC Radio on Wednesday.

“I don’t trust their public statements for one second, so we’ll have to make sure that organisation and the members aren’t continuing to promote or recruit.”

The ability to ban groups promoting violence was welcome, ASIO director-general Mike Burgess told a parliamentary inquiry into the draft bill on Tuesday.

“I’ve been on the record since early two years ago … talking about how words matter, because inflamed language can lead to inflamed tension, that can lead to violence,” he said.

“We’ve certainly seen a transition and a rise of that more permission for politically motivated violence or communal violence in our society.

“We’ve unfortunately as a nation, allowed behaviours to be normalised, and when they’re normalised, they’re accepted, and that means more of them, it’s more permissible, and it can happen.”

The bid to strengthen hate speech laws are in response to an Islamic State-inspired attack on a Jewish Hanukkah celebration at Bondi Beach on December 14.

A father and son are accused of killing 15 people and injuring more than 40 others.

A national day of mourning will take place on January 22, with flags to be flown at half-mast.

Home Affairs Minister Tony Burke has indicated extremist Islamic organisation Hizb-ut Tahrir and the neo-Nazi National Socialist Network could be listed under the reforms.

The nation’s biggest neo-Nazi group will disband by midnight on Sunday to avoid jail time under the new laws.

Opposition home affairs spokesman Jonno Duniam said the nation did not want people avoiding justice by “tearing down a banner and re-emerging under a different name”.

“The Albanese government must also clarify whether this disbandment actually makes it harder to prosecute the individuals responsible for spreading hate, intimidation and extremism,” he said.

“If extremist organisations have already found a way to circumvent these new laws, then it is very alarming.”

Nationals senator Bridget McKenzie is concerned there isn’t enough time to work through the legislation, calling the inquiry “quick and abrupt” for a bill with such significance.

“Unfortunately, the prime minister has chosen to play politics with this bill,” she told ABC Radio.

“He’s lumped migration changes in with the management of firearms and obviously in with hate speech laws.”

Taking guns from “law-abiding citizens” was not the appropriate response to the tragedy, she added.

Nationals senator Matt Canavan said he wouldn’t support the laws, and that the Bondi tragedy could be pinned on Labor’s immigration policies.

“It’s contemptible that a government would use the tragedy of Bondi to seek to rush through laws to protect themselves, rather than deal with a major issue here,” he told Nine’s Today program.

“(The issue) is the division that we’ve imported into this country by migration policies that don’t seek to assimilate and integrate people into the Australian way of life.”

The inquiry will hold a public hearing on Wednesday in Canberra, where it will hear from Jewish groups and human rights advocates.

A report is due by Friday before parliament returns next week to debate the reforms.