Australia warned that the United Nations (UN) risked becoming irrelevant if it performed only aid work and did not find a way to cope with international problems such as terrorism.

Echoing the words of the United States last year before the Iraq war, Australia's UN ambassador John Dauth urged the world body to get serious about reform to handle the world's challenges in the 21st century.

"The UN is a vital institution that does great humanitarian work but it must now strengthen its capacity to deal effectively with the problems we now face or risk sliding into irrelevance," Ambassador Dauth told the UN General Assembly.

"Terrorism will not simply fade away. In response we, the international community, can not allow security threats to fester," he said.

"Australia has long advocated the need for UN reform," he said, citing calls for change made by Foreign Minister Alexander Downer in 2000.

"This warning was before September 11, before coalition action in Afghanistan and Iraq, and before the terrorist bombings in Bali, Jakarta, Madrid, Istanbul and many other locations," he said.

"If the need for reform was pressing then, it is critical now," he said in a speech that closed the annual two week debate of world leaders at UN headquarters in New York.