Existing legislation that makes it an offence to publicly threaten or incite violence based on a person's race, religion or sexual orientation is failing to act as a proper deterrent, the state government says.
Labor will introduce a bill to parliament on Tuesday seeking to remove a check on the criminal sanctions, which currently require approval from the Director of Public Prosecutions before a case is launched.
The proposed overhaul would enable NSW Police to prosecute the offence without further approval.
For individuals, the crime holds a maximum punishment of up to three years imprisonment and a $11,000 fine.
Premier Chris Minns said laws protecting groups from threats and incitement of violence need to have teeth.
"NSW is the most successful multicultural state in the world, but our community cannot take that for granted," he said.
"There is no room for threats and incitement of violence in NSW."
Two convictions under the laws were previously annulled after it was revealed police did not get permission from the DPP to launch the cases.
The crime has never been successfully prosecuted since it was introduced in 2018.
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