The Coalition's proposed amendments would allow religious schools the right to expel transgender students and only offer protection to gay students.

Holly Conroy, a transgender woman and the organiser of the Wagga Mardi Gras, said the ongoing debate around this bill is "dangerous".

"It's going to cost lives," she said.

"This sort of bill has only one intention and that's to discriminate against people who are already extremely vulnerable.

"I think this is not only going to have a detrimental effect on their health, but that creates a snowball effect on other aspects like mental health, suicides, attempted suicides.

"I think this bill will drive those numbers through the roof."

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Ms Conroy believes the bill sends a message to transgender people that they are "second class citizens" and worries about the effect this will have on transgender children.

"[Transgender children] look at us as adults to guide and lead them, and half the adults are putting restrictions on them to make them feel less human," she said.

"Scott Morrison and his government ought to be ashamed of themselves. The fact that they're putting their names to this and trying to pass it off as something positive, I think it's disgusting."

Darrell Connellan, 14, is a transgender woman at a non-faith-based high school in Wagga, and she said that it's frustrating watching politicians in Canberra discuss issues which may affect her life.

"Considering they are not trans, to our knowledge, it's really none of their business. They shouldn't be talking about it without at least one person there who can understand," she said.

"It makes me feel a bit on edge, uncomfortable. Because there's all these people making decisions for us, who really don't have the right to."

The Bishop of the Diocese of Wagga Wagga Mark Edwards said the bill is needed to protect freedom of religion, a right that is not currently recognised in law in NSW.

He understands fears that the legislation could be used to discriminate against minority groups, but said that children within the Catholic church needn't worry.

"We have never expelled a child or asked a child to leave a school because of sexual preference," he said.

"There are a large number of students who've identified with a sex other than the sex they were given at birth ... and we're learning how to work with that. We're not expelling them from schools, we're helping them and their parents.

"Our Catholic schools system is inclusive."

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