World-first laws criminalising serious racial vilification coupled with a threat of violence, or inciting others to violence, were introduced in NSW in 1989 but have not resulted in a single prosecution.

The laws are bedevilled with procedural difficulties, including a requirement that the Attorney-General consent to a prosecution, and have lower maximum sentences than similar offences. It has led prosecutors to rely on other offences in race hate cases, such as encouraging riot and affray.

The government had promised to fix the laws in 2015 after the Director of Public Prosecutions decided not to lay race hate charges against Ismail al-Wahwah, the Sydney-based leader of fringe political group Hizb-ut Tahrir, over two speeches calling for a "jihad against the Jews".

An independent report canvassing the community response to potential changes was delivered to the government in May this year and was expected to lead to an overhaul of the laws. It followed a cross-party parliamentary review in 2013, which concluded the effectiveness of the offence was hindered by "procedural impediments" and recommended a raft of changes.

But it is understood the issue divided cabinet and plans to overhaul the laws have been shelved. Attorney-General Mark Speakman said there were "no present plans to amend section 20D of the Anti-Discrimination Act".

Mr Speakman said "existing general criminal law provisions, including in the Crimes Act, are potentially capable of covering conduct of the kind in question".

Opposition Leader Luke Foley said the proposed changes had "widespread support across the community" and "the only group not in favour of the changes ... are the Premier and her cabinet colleagues".

"Major ethnic, community, religious and legal groups have all supported the changes. A parliamentary committee made up of all parties supported the changes," Mr Foley said.

"The government is pandering to Pauline Hanson and the offensive, racist attitudes she proclaims."

Mr Foley said NSW was "a successful multicultural society" but "to maintain that, we have to make sure our laws protect people from the promotion and advocacy of violence on the basis of race".

"The only people in NSW who seem to be afraid of doing that are in the NSW government," he said.

An alliance of 31 community groups and leaders called the Keep NSW Safe coalition, including the Australian National Imams Council, Hindu Council of Australia and Chinese Australian Forum, had urged the government to amend the laws to increase the maximum penalty and make it easier to bring prosecutions.

Vic Alhadeff, spokesman for the Keep NSW Safe campaign and chief executive of the NSW Jewish Board of Deputies, said the coalition was "profoundly disappointed at the government's failure to honour its public commitment to fix this law".

"It is unacceptable, it is unconscionable, that one can incite violence against fellow Australians and that the law should be powerless to do anything about it," he said.