Independent National Security Legislation Monitor Jake Blight is leaning toward recommending that ideology be defined as a system of beliefs or ideas that relate to how society is or should be and is intended to be shared with others.
The definition of terrorism hasn't changed since 2002 after being enacted post 9/11, with questions over whether it is still fit for purpose.
There was no doubt the definition of terrorism would still cover causes like Islamic State even if the religious motivation term was scrapped, Mr Blight said, as he reviews the definition of a terrorist act under the criminal code in hearings on Tuesday and Wednesday.
Part of the review is looking at whether the religious motivation is legally necessary.
"I have received submissions arguing that by calling something 'religiously motivated' we inadvertently give false credibility and reinforce the narrative of those who say that they are doing 'holy work' which is above the law of the land," he said.
"This gives them authenticity they do not deserve and may push some young vulnerable people towards those views."
Almost all prosecutions that used the terrorist act definition prior to 2020 were associated with Al-Qaeda, Islamic State and like-minded groups, however there has been a rise of nationalist and racist causes over the past five years, the watchdog said.
While the overall numbers were small, there were more convictions for those linked to Al-Qaeda and Islamic State, Mr Blight noted, saying terrorism laws had to be able to deal equally with all emerging threats.
A terrorist act is currently defined as having an intention to coerce or influence by intimidation an Australian or foreign government, or intimidate the public or a section of the public.
There must be a motive, which is an intention to advance a political, religious or ideological cause, and specific harms must be applied.
Jewish groups are against carving out the religious motivation term, arguing it would weaken the laws, while ASIO warned changing the definition would make it harder to distinguish terrorism from other forms of politically motivated violence.
"Not clearly communicating such motivations risks introducing ambiguity and confusion," ASIO said in its submission.
Continuously linking Islam and terrorism "has lent credibility to the false and dangerous notion that Islam itself is a source of violence", a joint statement submitted by 15 Muslim groups said.
