A religious advisory council will be established as part of funding set aside for multicultural communities in the upcoming NSW state budget.
Minister for Multiculturalism Mark Coure said the initiative is not about conducting an "audit" of faith-based institutions, but "ensuring our religious communities feel safe".
"This will ensure that our faith-based institutions will have a voice around the table," he said while making the funding announcement in Sydney on Friday.
Of the $28 million earmarked for multicultural communities over two years, $16 million will go towards boosting translation resources, $10 million is for cultural community events and $2 million for community engagement.
The inaugural chair of the religious advisory council will be Nick Kaldas, the former deputy commissioner of the NSW Police Force.
He said he was "pleased and honoured" to take on the role and will be looking to further build "community cohesion and harmony" following the challenges of the floods and the pandemic.
The council will provide advice to Premier Dominic Perrottet, who said he looks forward to receiving it.
"And I know that this advisory council today will provide advice to the government about ways which we can improve security, can improve our faith-based communities feel safe and secure in the practice of religion," said the premier, who is a devout Catholic.
The NSW Jewish Board of Deputies said the funding was needed to ensure anti-Semitic attacks and abuse were eradicated.
"We have seen especially during COVID, a rise in anti-Semitism online that has translated into actions that have taken place at places of worship," he said.
"We've seen the Nazi swastika put up at our faith institutions. That is intimidating.
"An attack on one faith is an attack on all of us. And it's really important that we all take action as a collective to ensure that everybody feels safe."
Mr Perrottet said the pandemic exposed gaps in communication and translation of critical messages to multicultural communities.
"We've had one of the best responses to COVID anywhere in the world. There have been multifaceted challenges throughout all of that. And I just want to thank our leaders for the role that they played in getting the message out when we were in lockdowns."
"What has really come through during COVID [the pandemic] is we've seen the importance of that engagement [with multicultural communities]. We know that celebrating culture, celebrating diversity is what makes our state great."
He said the budget allocation for multicultural communities represents a tripling of the amount in this area.
"This investment today, the tripling of our investment for multicultural and multi-faith communities, I believe goes a long way towards harmony, but also allowing everyone across our state to enjoy the rich culture that our multicultural society provides."
Imam Shady Alsuleiman, president of the Australian National Imams Council, said he welcomed the creation of the council.
"One of the primary things we have been engaging with the government is to have a voice for faith-based communities; and foster a better relationship among the faith communities and the government," he said.
Since 2017, the has been collecting information on verified incidents of abuse, noting an impact since the Christchurch mosque shootings on 15 March 2019.
In the latest report released this year in March, there were 247 incidents - both physical and online. This compares to 349 incidents in the report published in 2019. The 2017 report noted 243 reported incidents.
Imam Alsuleiman said there has been increased vigilance and concern in the Muslim community.
"The safety and security of religious institutions is a serious concern for us," he told SBS News.
"Within the Muslim community, especially post-Christchurch in New Zealand, which is not far away from us, there has been a rising concern within faith-based institutions - mosques, Islamic centre schools."
At least 27.6 per cent of residents in New South Wales were born overseas in non-English speaking countries, according to the 2016 Census.
At least 26 per cent of the state population speak a language other than English at home.
