A private members' bill put forward by Labor MP Paul Lynch had aimed to make it "unlawful to vilify a person or group of persons" on the grounds of specific religious belief or affiliation.

The bill was narrowly defeated last week due to opposition from Coalition MPs, with the NSW government stating it did not want to pre-empt any new federal laws.

Bishop Edwards said he was now looking forward to the details of federal legislation, which is still in the consultation stage.

"There are protections for people in most other states; NSW and South Australia are the exceptions," he said.

"At the moment, if you were an atheist or a Buddhist or a Catholic and you walked into a shop and somebody refused to serve you on the basis of you being an atheist or a Buddhist or a Catholic, you would have no legal recourse.

"It doesn't happen, but it also doesn't seem right so that would be one of the points to having [laws[ like this."

Independent Wagga MP Joe McGirr voted in favour of the bill and told Parliament that NSW should act as the federal government had appeared "to kick the can down the road on this important reform".

"In multicultural Wagga, all should be free to live, work, learn and practice their faith," Dr McGirr told Parliament.

"[Last month] I was privileged to attend the sod-turning event for a prayer house for the Islamic community in my city. It was a great and welcoming event that brought together, under the Islamic faith, people of many different nationalities.

"It was a great, warm, welcoming, positive feeling. We know how the Islamic community has probably suffered more than most in our society with vilification issues. This legislation would play a very important role to prevent this."

The Muslim Association of Riverina Wagga was unable to comment due to a change in leadership this week.

Liberal Albury MP Justin Clancy said both sides of politics had a "real desire" to prohibit discrimination on the grounds of religious belief but the NSW government should wait for the Commonwealth legislation.

"It is appropriate to await the passage of Commonwealth legislation so the NSW government can consider its interaction with proposed legislation so that it avoids constitutional inconsistency," Albury MP Justin Clancy told Parliament.

NSW Parliament's Legislation Review Committee had raised concerns that the proposed bill before state MPs "trespasses on personal rights and liberties".

"The [bill's] definition of public act includes a broad range of communications. Limiting the subject matter of such public communications may infringe on a person's right to free speech," the committee's report stated.

Bishop Edwards said that he had not personally seen religious discrimination in Wagga as in his experience it was a "very friendly and tolerant place" and legislation could help reinforce that.

The federal government will reportedly bring its religious discrimination laws to parliament as early as next week for the final sitting fortnight of the year.

The bill has attracted a lot of opposition from groups concerned about the potential for people and organisations with religious beliefs to be granted the ability to discriminate against others.

There has also been pressure from some Conservative groups to grant greater protections to people who express statements of religious belief, such as in the case of Israel Folau who was sacked by Rugby Australia for stating on social media that homosexual people would go to hell.

Bishop Edwards said he would be comfortable with "reasonable" federal legislation on religious freedom and he didn't want "change our society with the tolerance we have".

"The difficulty is where it interacts with other attributes and other freedoms, for example there might be somebody in a same sex-relationship who wants to teach at a Muslim or Catholic school," he said.

"We want to be fair to people but I think society is richer for having Muslim schools and Catholic schools, it makes Australia more the place we want to be.

"That's probably where the challenges will come: in those interactions between rights."

Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: