The report calls for the federal Sex Discrimination Act to be amended to allow religious schools to discriminate against students on the basis of sexual orientation, gender identity or relationship status - something some but not all states already allow. Loading “There is a wide variety of religious schools in Australia and ... to some school communities, cultivating an environment and ethos which conforms to their religious beliefs is of paramount importance,” the report noted. “To the extent that this can be done in the context of appropriate safeguards for the rights and mental health of the child, the panel accepts their right to select, or preference, students who uphold the religious convictions of that school community.” Commonwealth law already contains some provisions to permit discrimination against gay students and teachers.

However the report said any further amendments to the Sex Discrimination Act should only apply to new enrolments. The school would also have to have a publicly available policy outlining its position, and should regard the best interests of the child as the “primary consideration of its conduct”. The panel also agreed that faith-based schools should have some discretion to discriminate in the hiring of teachers on the basis of religious belief, sexual orientation, gender identity or relationship status. In a statement on Wednesday morning, Prime Minister Scott Morrison said: "Our government will consider the details and release our response after it has gone through a proper cabinet process." "We will protect religious freedom, and get the balance right," he said. "Each proposal will be considered carefully and respectfully before any final decisions are taken." The religious freedom review, which was handed to former prime minister Malcolm Turnbull in May, received more than 15,000 submissions.

The panel was chaired by Howard government attorney-general Philip Ruddock and included the Australian Human Rights Commission president Rosalind Croucher, former Federal Court judge Annabelle Bennett, human rights lawyer and priest Frank Brennan and constitutional law professor Nicholas Aroney. Loading The authors rejected several measures demanded by conservatives, including some which were unsuccessfully floated as amendments to the same-sex marriage legislation passed last year. The panel did not accept that businesses should be allowed to refuse services on religious grounds, warning this would “unnecessarily encroach on other human rights” and “may cause significant harm to vulnerable groups”. The review also found civil celebrants should not be entitled to refuse to conduct same-sex wedding ceremonies if they became celebrants after it was was legalised.

The review does not recommend any changes to the Marriage Act. Nor does it recommend a dedicated Religious Freedom Act - championed by several major Christian churches - which would have enshrined religious organisations’ exemptions from anti-discrimination laws. “Specifically protecting freedom of religion would be out of step with the treatment of other rights,” the report found. However it did recommend the government amend the Racial Discrimination Act or create a new Religious Discrimination Act, which would make it illegal to discriminate on the basis of a person’s religious belief or lack thereof. The panel said it had heard a broad range of concerns about people’s ability to “manifest their faith publicly without suffering discrimination”. This included wearing religious symbols and dress at school or work, communicating views based on religious understandings, obtaining goods and services and engaging in public life without fear of discrimination.

The report also recommends federal legislation “to make it clear” that religious schools cannot be forced to lease their facilities for a same-sex marriage, as long as the refusal is made in the name of religious doctrine. Loading Mr Morrison last month told Fairfax Media new religious freedom laws were needed to safeguard personal liberty in a changing society. “Just because things haven’t been a problem in the past doesn’t mean they won’t be a problem in the future,” he said. While the panel accepted the right of religious school to discriminate against students on the basis of gender identity or sexual orientation, it could see no justification for a school to discriminate on the basis of race, disability, pregnancy or intersex status.

It said the states should abolish any laws that allowed for discrimination against teachers or students on this basis. Religious schools already enjoy exemptions from discrimination laws when it comes to hiring teachers in all jurisdictions. Some religious groups argued these exemptions should be retained while LGBTI groups - who told the panel of the stress and mental health pressure on teachers forced to hide their identity - called for them to be repealed. “(An) example was given of an employee at a religious school who was employed despite being open about being same-sex attracted,” the report said. “Later, when the leadership of the school changed, that teacher was dismissed on the basis of his sexuality.” Last year's same-sex marriage victory triggered the religious freedom review. Credit:AAP

The panel found that when it came to employment in religious schools, “undoubtedly the most difficult issue” was exceptions for sexual orientation and gender identity and marital status in light of the passage of marriage equality. It recommended the Commonwealth law be amended to allow this discrimination, but only if the school had a publicly available policy. “For the panel, the key to the maintenance of existing exceptions (to discrimination law) is clarity and transparency…”. The report also recommends the states ensure existing same-sex teachers are not discriminated against if they get married to a same-sex partner. The panel also found that blasphemy laws are out of step with a modern, tolerant, multicultural society and should be abolished, and said there was an absence of any concrete indications that funding to faith-based charities was under immediate threat.