The tools being used to keep Australian children safe online will be reviewed and the government is providing $10 million to help make them better.

The Online Safety Grants Program will help non-government organisations develop practical tools and training projects to teach children to be safe online.

"Every mum and dad, including me and Jen, worries about our kids' when they go online. It's terrifying for parents," Prime Minister Scott Morrison said on Saturday.

"Jenny and I sit down with our girls and talk to them about being safe and responsible.

"We all have a role to play to ensure our children have the tools and information they need to stay safe whenever they are online."

Following a request from child psychologist Dr Michael Carr Gregg, the government will commission a review of 'digital licences' and other tools designed to build and test children's online safety skills.

The review will look at existing tools, in particular the 'eSmart Digital Licence' developed by the Alannah and Madeline Foundation.

It will also explore the best way to develop a competency-based program for educating children about online safety, and what improvements are needed to current tools in use.

"We've seen too many tragic cases of online abuse and bullying," Mr Morrison said.

"This new suite of measures will help our children stay safe online and support parents, community leaders and teachers to do our bit."

Communications Minister Mitch Fifield said protecting children was society's highest obligation.

"We've already done some good work in the online environment. We've established the world's first eSafety Commissioner. We've legislated a kids cyber-bullying material take-down regime," Senator Fifield said.

"But the community expect us to do more."

The $10 million grant program will be administered by the Office of the eSafety Commissioner.

Meanwhile, shadow communications minister Michelle Rowland said Labor would commit $2.5 billion to a pilot of the digital licence initiative for all year 3 students.

"After consultation widely in the sector and examining the outcomes, Labor believes this is the age that young people all over Australia have the opportunity to access this very important tool," Ms Rowland said.

"Labor's intention is to roll out the eSmart Digital Licence nationally so the resource is available for any school that wants to take it up."