A proposed new anti-discrimination law should scrap blanket exemptions for religious groups, as recommended by a Senate inquiry, human rights campaigners say.
The Senate legal and constitutional affairs community handed down its report into the Human Rights and Anti-Discrimination Bill 2012 on Thursday.
The bill is designed to amalgamate five anti-discrimination laws.
The committee made 12 recommendations, including removing exceptions that allow religious organisations to discriminate against individuals in the provision of services.
The Human Rights Law Centre said the recommendations were commonsense and would iron out the problems with the bill.
"Religious groups, particularly those receiving public funds, should not be given a free licence to discriminate against gay and lesbian Australians, women and de facto couples," spokeswoman Rachel Ball said.
Lobby group GetUp said the recommendations might encourage some religious organisations to question why they still feel the need to discriminate.
Attorney-General Mark Dreyfus said the report will require close consideration and he'll release a full response soon.
"This is a complex project and I want to ensure the final consolidation carefully balances the two objectives of defending free speech while protecting Australians from discrimination," he said.
Australian Greens senator Penny Wright said the recommendations bring the draft legislation into line with international standards.
She said Labor backbenchers on the committee had supported removing the blanket exemptions for church groups.
"The prime minister apparently guaranteed to Jim Wallace of the Australian Christian Lobby that her government would not alter current religious exemptions, but her own MPs clearly do not believe this was the right call," Senator Wright said.
"Will she take the advice of her own party or will she be beholden to an unrepresentative lobby group?"
She hailed the recommendation that will provide specific status for intersex people, who previously had no federal discrimination protection.
Opposition legal spokesman George Brandis said one of the redeeming features of the original bill was that faith-based institutions retained an exemption from anti-discrimination law "to enable them to observe and teach the tenets of their faiths".
"This represents an attack on religious freedom by the Gillard government with few parallels in Australian history," he said in a statement.