NSW may tighten laws to explicitly ban the Nazi salute following a white supremacist rally in Corowa, which drew around 50 participants.
While displaying Nazi symbols without reasonable excuse is already illegal in NSW, Premier Chris Minns vowed to eliminate any legal ambiguity regarding the salute.
No arrests were made at the rally, but investigations are ongoing.
Deputy federal opposition leader Sussan Ley urged stronger state action, noting participants crossed into NSW to exploit legal loopholes.
Federal laws banning Nazi symbols and salutes took effect in January, with Victoria and Tasmania already enforcing similar state bans.
In June, three men were convicted in NSW for making Nazi salutes, though they have appealed the convictions.