A man convicted of plotting to gun down New Year's revellers and take hostages in Melbourne will serve more jail time on appeal.
Ali Khalif Shire Ali admitted planning to shoot crowds as they welcomed in 2018 at Federation Square.
He also planned to take hostages at a nearby bar and make one of them hold an Islamic State flag in the window.
Ali was jailed in May for a maximum of 10 years, with a seven-and-a-half year non-parole period. Prosecutors argued this was inadequate.
The Court of Appeal on Friday agreed, finding it failed to sufficiently denounce Ali's crime or serve as a deterrent to other would-be terror plotters.
He was re-sentenced to 16 years' jail, and must serve 12 years before becoming eligible for release on parole.
"He intended to inflict mass casualties on random members of the public, gathered together at a time of annual civic celebration," the appeal judges said.
"An additional sinister element, involving the taking of hostages, was calculated to subject a smaller group of victims to a more intimately terrifying encounter."
Ali pleaded guilty to preparing for a terrorist act and denounced Islamic State in court before being handed his initial sentence. He's been in custody since November 2017.
His brother Hassan Khalif Shire Ali was shot dead by police in Bourke Street a year later, after killing one person and injuring two others in a stabbing attack.
