Labor will push for sweeping changes to fix "big flaws" in the government's religious discrimination bill, including revising the controversial statement of belief clause and extending protections to transgender students at faith-based schools.
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Caucus endorsed the position on Wednesday morning following an emergency meeting of shadow cabinet.
Labor's stance creates another hurdle for Prime Minister Scott Morrison as he attempts to push the bill through parliament before the federal election.
With at least one Liberal moderate and most crossbenchers publicly opposed to the bill as it stands, Mr Morrison is relying on Labor's support to deliver on a promise first made ahead of the 2019 election.
But Labor has now committed to pushing for a major rewrite of the bill when debate resumes.
The opposition will seek significant changes to the "statement of belief" clause, which would provide a shield for people who make comments aligned with their faith - provided they aren't malicious.
Equality advocates have feared the clause would open the door to discrimination against groups including LGBTIQ people and people with a disability.
In a statement on Wednesday, shadow attorney-general Mark Dreyfus said the clause was drafted in a way that suggested people of faith should be able to discriminate against other Australians.
"Labor does not believe that people of faith want the right to discriminate against other Australians," he said.
Mr Dreyfus said Labor's amendments would ensure that statements of beliefs would not constitute discrimination.
Labor will also seek wider amendments to the Sex Discrimination Act to ensure both gay and transgender students are protected from discrimination at religious schools.
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The Coalition only plans to legislate protections for gay students in the short term.
"Labor supports removing discrimination against all kids," Mr Dreyfus said.
Attorney-General Michaelia Cash on Tuesday warned that stripping the rights of religious schools to discriminate against transgender students could "nullify" the "ethos" of single-sex schools.
Senator Cash said same-sex religious schools would not be equipped to cater for the needs of transgender students, pointing to bathrooms and uniforms as issues that would need to be addressed.
Labor's amendments would also seek to prohibit religious vilification, and make clear that aged service providers cannot discriminate on the basis of religion during care.
Mr Dreyfus said Labor would move amendments in both houses and, if successful in either, would "insist" on them becoming law.
However, it's not clear if Labor would be prepared to oppose the bill if the amendments were voted down.
The push follows a major intervention from senior Labor MP Stephen Jones, who used an emotional speech drawing on the recent death of his gay 15-year-old nephew to call for the bill not to be rushed through.
ACT Chief Minister Andrew Barr, the first gay leader of a government in Australia, also called on his federal colleagues to oppose the bill in its current form.
Mr Barr expressed concerns that the bill, through the statement of belief clause, would override the ACT's human rights legislation.
The ACT Chief Minister believed the Coalition's main intention was to wedge Labor, as he lamented how polarised and lacking in nuance the religious discrimination had become.
But he warned that Labor would have to explain itself if it waved through the bill without amendments.
"If they wave it through without amendment and Liberal members are crossing the floor against their own government's bill, and Labor votes for it, that is problematic," he said.
"It would need quite a detailed explanation as to why it should be supported unamended."
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