"I thank the Prime Minister for his leadership on this matter and pay tribute to all the community leaders who stood together to oppose the changes," said Uniting Church President Rev. Prof. Andrew Dutney.
"This decision is a positive outcome for our democracy in that elected leaders are willing to receive and accept feedback from the community.
"It is a credit to our nation that as a community we have left no one in any doubt that bigotry and racism are totally unacceptable."
The Uniting Church in Australia through UnitingJustice was one of more than 4000 organisations and individuals that made a submission into a parliamentary inquiry into the Government's proposed legislation.
National Director of UnitingJustice Rev. Elenie Poulos welcomed the Government's decision.
"Under the proposed changes, the words 'offend, insult and humiliate' would have been deleted from the existing laws," said Rev. Poulos.
"The amendments would have removed those boundaries and basically given people free rein to racially vilify others."
"As I said in response to the amendments - racism is a sin - a denial of human dignity and we must do all we can as a society to rid ourselves of bigotry and prejudice.
"It is a welcome development that the Government has secured the well-established protections that the proposed changes to the Racial Discrimination Act would have undermined," said Rev. Poulos.