The push to protect LGBT+ students from discrimination in religious schools has suffered a setback with a Senate report calling the proposed bill "flawed".
A coalition majority Senate committee report released on Thursday recommended the bill and circulated amendments "not be passed" and instead the issue be referred to the Australian Law Reform Commission for "full and proper consideration".
Senator Ian Macdonald wrote "the committee is of the opinion that matters of anti-discrimination and religious freedom are too important and too complex to be dealt with in haste".
"While the committee considers it necessary and appropriate to prohibit discrimination against LGBTIQ+ school students, it is of the view that this should not occur at the expense of the ability of religious educational institutions to maintain their ethos through what they teach and the rules of conduct that they impose on their students."
The committee received submissions from 1092 organisations and individuals, 9000 items of correspondence and held two public hearings in Brisbane and Sydney.
The Labor bill, introduced in November by Senator Penny Wong, sought to amend the sex discrimination act to prevent schools from discriminating against students on the basis of sexual orientation, gender identity or intersex status.
Labor senators Louise Pratt and Murray Watt said in their dissenting report they were "deeply disappointed" with the government's decision to defer the bill and were "aggrieved" by the lack of sitting days available to debate the issue.
Religious institutions and legal experts noted that subsection 37 of the bill was "too broadly worded" and said there were "significant, presumably unintended' consequences" for the ordinary teaching of religious bodies, such as bible readings in a chapel.
In the Labor report Senator Pratt agreed with these concerns, arguing that the bill be passed after clarifying "the scope of educational institutions in section 37".
The dissenting reports by Labor and the Greens rejected government amendments ensuring any "teaching activities" and "rules" relating to the religious tenets of school remained lawful, arguing they would "entrench" or "carve out" discrimination.
Bill Shorten on Saturday said "the case for not discriminating against kids on the basis of sexuality is one hundred per cent clear".
"We would like to see that legislated. Of course we need to get everyone else in the parliament to agree with us."
The Law Council of Australia said in a statement that while "preferring comprehensive rather than piecemeal reform" they "generally supported the passage of the Bill".
In December Scott Morrison said he would allow a conscience vote on the issue - an offer which was rejected by Labor and the Greens, who agreed to delay debate to continue negotiations in light of the government's controversial amendments.
AAP has contacted Education Minister Dan Tehan for comment.
