Malcolm Turnbull's former electorate has a high number of LGBTI voters.
Religious schools would be guaranteed the right to reject gay students and teachers through changes to anti-discrimination laws recommended by a long-awaited review into religious freedoms.
"There is a wide variety of religious schools in Australia and ... to some school communities, cultivating an environment and ethos which conforms to their religious beliefs is of paramount importance", Fairfax Media quoted the report as saying.
But he warned a religious discrimination law that "went further and allowed discrimination against Australians in the name of faith" would be unacceptable.
The leaked contents of a review into religious freedom prompted fears that the Government may bolster anti-LGBT rules in the Sex Discrimination Act.
Mr Hawke said people of faith in Australia were under attack.More news: New York Giants will release Ereck Flowers on Tuesday if not traded
Religious schools already have exemptions to discrimination laws that allow them to exclude gay people in several states, including NSW, but not in others like Queensland.
The panel supported the right for religious groups and schools to choose students and congregants in accordance with their beliefs.
'At the end of the day, if you're not free to believe in your own faith, well, you're not free, ' Mr Morrison said.
Gay teachers and students are under threat from a proposed law change.
One of the recommendations is that the legislative provisions allowing religious schools to discriminate on the basis of sexual orientation, gender identity or relationship status should be made consistent around the country. "We shouldn't even be having this debate", said opposition leader Bill Shorten.
"The fact is every child is entitled to human dignity".More news: Huawei to sell servers with its own chips in cloud computing push
Recently when the senate passed a motion demanding the report be released, Senator Mathias Cormann said it could not be made public because it was now being considered by cabinet.
The Ruddock inquiry was convened in the wash up of the same-sex marriage debate that saw gay couples legally allowed to Wednesday from January this year. This morning a succession of cabinet ministers stated that had not seen the report.
The panel did not accept that businesses should be allowed to refuse services on religious grounds, such as denying a gay couple a wedding cake.
The review also rejected any changes to the marriage act, a dedicated "religious freedom" act or that civil celebrants should be able to opt out of same-sex ceremonies.
Just over half of Australians identified as Christian in the last census, while 30 per cent said they had no religion.
Alex Greenwich, an MP from Sydney and a gay rights activist, said he was concerned about the divisiveness of the report.More news: Natural disaster strikes Bali as ASEAN leaders gather for meeting
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