Some of the most prominent voices in religion in Australia are driven by fear, and Christians in particular have an unfounded anxiety about being persecuted, Baptist minister and social justice advocate Tim Costello has said.

Key points: Mr Costello said the asylum seeker debate led to a fear of others

Mr Costello said the asylum seeker debate led to a fear of others He singled out conservative Lyle Shelton over a campaign to climb Uluru

He singled out conservative Lyle Shelton over a campaign to climb Uluru He called for the Government to allow religions to practise "fair discrimination"

The senior fellow at the Centre for Public Christianity said a "toxic" debate around asylum seekers in the past decade had "damaged the Australian soul" and contributed to a paralysing fear of others that had crept into public discourse.

"It worries me that some of the loudest voices in terms of faith seem to have the most fear," he told the ABC.

"Their fear of being persecuted as Christians in this country — I don't get that.

"We've just elected our first Pentecostal prime minister who can pray publicly.

"It seems to me that fear of the other is where that starts.

"Fear paralyses us. I actually think Gandhi got it right, he said, 'we think the real enemy is hate, it's not. The real enemy is fear'. Fear of others leads to hate."

Mr Costello singled out former head of the Australian Christian Lobby, Lyle Shelton, who has recently campaigned for the right to continue climbing Uluru as the date nears for its closure.

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"I'd say to Lyle: 'God must love diversity. He created so much of it'," Mr Costello said.

"And rather than being fearful of diversity, Indigenous diversity and respect for what is their sacred beliefs is fundamental to my freedom of religion."

Mr Shelton responded by saying he had "huge respect" for Mr Costello, but he had made a few wrong assumptions.

Lyle Shelton has campaigned to continue climbing Uluru. ( AAP: Mick Tsikas )

"I don't fear diversity, that would be irrational. I believe Uluru should be allowed to be climbed because that is what humans have been doing for 30,000 years," Mr Shelton told the ABC.

"By all means we should show respect to Indigenous beliefs but the beliefs around whether or not to climb are disputed.

"Respect does not need to extend to closing off a wonderful adventure experience for all people."

Government vows action on religion

The Federal Government has announced plans for a religious discrimination act and is working with MPs across the political spectrum to bring a bill before Parliament by the end of the year.

Some conservative Coalition MPs — including Barnaby Joyce and Concetta Fierravanti-Wells — have called for the bill to go further, and deal specifically with religious freedoms rather than just freedom from discrimination.

Attorney-General Christian Porter has previously ruled this out, saying the bill would "follow the basic architecture of discrimination bills".

Earlier this month, Prime Minister Scott Morrison sidestepped a question on whether the laws would shield someone like Israel Folau from being sacked for the remarks he made on social media, saying he was reluctant to comment on that case because it would soon be before the courts.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 11 minutes 1 second 11 m Scott Morrison outlines his religious protections plan.

But he added employers should not "impinge on areas of private practice and private belief".

Mr Costello said he did not think religious freedom was under threat in Australia, but he did believe there should be some measures to allow religions to practise "fair discrimination".

"I certainly believe that Christian schools, Jewish, Muslim schools, should be able to hire teachers who actually share their vision of flourishing and their belief system," he said.

"Just like you don't ask the IPA [Institute of Public Affairs] to employ the left-of-centre people or the Greens to hire coal miners.

"I think those things need to be tidied up."

He argued current discrimination laws did not offer enough protection, and used the hypothetical example of a modelling agency rejecting his request for a contract.

"And if they rejected me on my physical appearance ... that modelling agency has to claim an exemption from discrimination," he said.

"So we do need exemptions."