Prime Minister Malcolm Turnbull is having urgent talks with Japanese counterpart Shinzo Abe about the latest North Korean ballistic missile launch over his country.
The Australian government has joined global condemnation of the reclusive state following Tuesday's missile test.
The United Nations Security Council had an emergency meeting calling for the strict implementation of existing sanctions on North Korea.
Mr Turnbull again urged China to step up.
"China has the greatest leverage over North Korea. It has a unique ability to bring the North Korean regime to its senses by applying economic pressure," he told reporters in Sydney on Wednesday.
Defence Industry Minister Christopher Pyne told reporters in Adelaide the government was considering upgrading the Navy's new air warfare destroyers to include missile defence shields in the wake of North Korea's "very irregular behaviour".
He said Australia may modify the $1.3 billion missile shield announced in June to be seaborne rather than land-borne, and indicated upgrades to the warfare destroyer capabilities had been already flagged.
Foreign Minister Julie Bishop is hopeful the toughest sanctions ever slated against Pyongyang will soon bite and is confident Russia and China will get on board.
"If they are applied universally then North Korea will feel the brunt of these sanctions and realise that a penalty has to be paid for its illegal and provocative behaviour," she told Sky News.
In light of the latest missile launch over the north of Japan, she conceded military options are on America's table, but said Secretary of State Rex Tillerson had assured her the US wants to explore every diplomatic and economic option first.
"I don't accept that North Korea can't be deterred," Ms Bishop told the Nine Network.
Mr Tillerson told her as recently as Friday he is also of that view.
"But it will take some time, some patience and the determination on the part of the international community to implement the sanctions comprehensively so North Korea can't evade them as they have been in the past," she said.
Ms Bishop believes North Korean leader Kim Jong-Un is trying to increase his leverage and wants to sit down and negotiate with the US as an equal.