The report was brought on by a committee looking at ways the federal government can foster positive attitudes towards migrants.
Chair of the Migration Comittee Minister Maria Vamvakinou told SBS that Australian-Muslims have been treated differently in the post September 11 environment and said governments need to continue funding anti-racism and multi-faith initiatives.
"[Australian-Muslims] went from being migrants to suddenly being Muslims, and they were separated from the rest of the migrant community and put under incredible scrutiny."
The report also recommends more funding for cultural and sporting programs.
The report has been a work in progress for two years and considered submissions made by the public.
Previously, speculation surrounding Shariah Law submissions had been raised but of the 500 submissions made to the committee only one called for Shariah Law.
Other cultural issues like 'over-qualified taxi driver syndrome' were also addressed.
"If we've got a whole bunch of people, not just driving taxis, but unable to work in areas that they have expertise in... then we're missing out as a country," said Minister Vamvakinou.
