Coalition party room endorses religious discrimination bill, as Cash defends trans kids carve out

Senator Cash has defended the government's decision not to immediately push for new protections for transgender students at faith-based schools as part of its controversial package of religious discrimination measures.

The Coalition party room green lit the government's position late on Tuesday afternoon despite resistance from some moderate Liberals and furious opposition from equality advocates - including former swimming champion Ian Thorpe.

The endorsement is a boost for Prime Minister Scott Morrison, who has made it his top priority to pass the religious discrimination bill as well as amendments to the Sex Discrimination Act before the election.

Focus will now shift to Labor, which had been waiting for the government to confirm its position before finalising their own.

The Morrison government might need Labor's support to pass the bill, with at least one Liberal backbencher - Bridget Archer - publicly declaring opposition and another reserving their right to cross the floor.

Ms Archer confirmed her opposition to the bill in a speech delivered in the House of Representatives soon after Tuesday afternoon's meeting.

The Tasmanian MP said she "wouldn't be doing her job" if she backed a bill which, via the contentious statement of belief clause, would override Tasmania's strong anti-discrimination regime.

The clause would protect people of faith who make statements aligned with their religious belief.

Equality advocates - including Mr Thorpe - believe the provision would authorise "state-sanctioned discrimination" against marginalised groups.

"I'm not prepared to stand by and see our state laws eroded to privilege one group over another," Ms Archer said in her speech.

"It's not okay to be cruel, offensive or humiliating, just because you can say it with conviction or point to a religious text to back it up."

Wentworth MP Dave Sharm also raised concerns about the statement of belief clause in the lower house early on Tuesday evening.

The government has also confirmed its proposal to amend the Sex Discrimination Act to ban faith-based schools from expelling gay students on the basis of their sexual orientation. However, the changes won't extend the same protections to transgender students.

The government will instead await the findings of an Australian Law Reform Commission review, which wouldn't be handed down until 12 months after the religious discrimination bill passes, before making further changes.

Revelations about the narrow scope of proposed changes to the Sex Discrimination Act sparked a furious response from equality advocates on Tuesday morning.

Equality Australia had not only wanted gay and transgender students to be protected from expulsion on the basis of their sexuality and gender identity, but also shielded from suspension and other forms of discrimination.

The advocacy group's chief executive, Anna Brown, accused Mr Morrison of a "complete failure to live up to his commitment" to protect students.

But Senator Cash has defended the government's stance.

She said axing the rights of religious schools to discriminate against a student on the basis of their gender identity could potentially "nullify the intention or ethos" of single-sex faith-based schools.

Senator Cash said same-sex religious schools would not be equipped to cater for the needs of a student who transitioned, pointing to bathrooms and uniforms as issues which would need to be addressed.

"Striking the balance between any individuals right to want to change their sexual identity and other parents' and childrens' wishes to go to a single-sex school must be sensitively managed," she said.

Senator Cash said the law reform commission process would ensure the issues could be managed and addressed properly.