Religious freedom review by year's end: PM

Australian PM Scott Morrison

Australian PM Scott Morrison

Schools could reject gay and transgender students and teachers under recommendations from a review into religious freedom.

Australian Prime Minister Scott Morrison said religious schools are already legally allowed to deny students a place based on their sexual orientation, following criticism of a leaked report that proposes allowing schools to bar them.

Commonwealth laws also contain some provisions to permit faith-based schools this discretion.

Morrison said the report has not been considered by the Cabinet, but would be released "in due course".

Gay teachers and students are under threat from a proposed law change.

Former Liberal minister Phillip Ruddock, who chaired the review into religious freedoms, says the right of schools to turn away gay students and teachers should be enshrined in the Sex Discrimination Act.

'There is a wide variety of religious schools in Australia some school communities, cultivating an environment and ethos which conforms to their religious beliefs is of paramount importance, ' the report stated. "We shouldn't even be having this debate", opposition leader Bill Shorten said.

Morrison said the Ruddock review had not yet gone to cabinet and the government had a "timetable to deal with this by the end of the year", appearing to confirm fears of former high court judge Michael Kirby and the independent candidate Kerryn Phelps it will not be released until after the 20 October Wentworth byelection.

"I think absolutely religious schools have the right to teach their religion at their school and to employ people where they have a consistent view with their religion".

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Mr Hawke said people of faith in Australia were under attack.

"It's a constant pressure from the left of society on people of faith".

The review was ordered after same-sex marriage became legal in December 2017, to address concerns of religious communities who anxious marriage equality would infringe on their right to act in accordance with their beliefs.

"As a human being and as a mother, the idea that adults would be discriminating against or rejecting children seems to me pretty bad", Ms Plibersek told Sky News earlier today.

"The Ruddock inquiry recommendations are direct and shameful assault on the dignity and equality of LGBTI people and we will oppose their implementation tooth and nail".

Alex Greenwich, a NSW state MP who co-chaired the national campaign in support of same-sex marriage, is demanding the federal government rule it out.

A leaked report that has recommended schools be able to bar gay students from attending has been slammed as "utter crap" and "silly" by politicians and discrimination by human rights campaigners.

It also did not accept that businesses should be allowed to refuse services on religious grounds, warning that this could "encroach on other human rights".

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