Australian Prime Minister Tony Abbott's softening stance on racial discrimination laws has angered the Jewish community. Jewish leaders in Australia are angry with the federal government over the proposed changes to the country's racial hate laws which would bring complications in the litigation against anti-Semites and Holocaust deniers.

The Coalition government has announced a draft of its proposed legislation last March 25 to replace racial discrimination laws which have been in place for nearly two decades and used by the Executive Council of Australian Jewry.

Under the federal government's proposed changes, the new Racial Discrimination Act will no longer make it illegal to "offend, insult or humiliate" an Australian because of their race or ethnicity. However, the law will not allow anyone to be intimidated based on race.

Mr Abbott said the government is trying to maintain the "red light" on inciting racial hate but Australia will remove the "amber light on free speech."

The proposed changes had Jewish groups fuming in anger with Executive Council of Australian Jewry Robert Goot saying that the law is "deeply flawed" and disregards "key protections" for ethnic groups in the country.

Mr Goot said the new legislation will encourage racial hate speech in Australia. Dr Colin Rubenstein of the Australia/Israel & Jewish Affairs Council agreed and remarked that the proposed amendment will remove protection against public humiliation and insults.

Dr Rubenstein added that Australia's softening stand on racial discrimination laws will "embolden racists" and risk the quality of life of ethnic minorities living in Australia.

Josh Frydenberg, the only Jewish MP in the Coalition, may be caught between both sides of the argument. He believed that the proposed changes will protect freedom of speech while ensuring those who will defame or malign a person because of his race will be punished. Mr Frydenberg told local media that it's about "getting the balance right."

The showdown between the Jewish community and the Australian government has been provoked since a pre-election pledge in 2013 to abolish race hate laws to protect freedom of speech.