Anthony Albanese has managed a remarkable feat with his decision this week to shelve a religious freedom law unless he can secure approval from Peter Dutton to give it a smooth passage through the parliament. Everyone feels they have lost, whether they wanted more rights for religious schools or more protection for gay teachers and transgender students.

In one remark, relayed second-hand to journalists from the Labor caucus meeting on Tuesday, the prime minister offended the Greens, equality campaigners, Christian schools and church leaders, who all had different views on how the law should work.

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And Dutton was incensed. The opposition leader worked himself into a tirade at a press conference on Tuesday, as if it was an outrage for one side of politics to seek a bipartisan agreement with another. He seemed truly angry that Albanese only wanted to pass a law the Coalition could accept.

The anger seems overdone. Perhaps the real frustration in the opposition is that Albanese will not give it the fight it wants. That’s because there will be no chance for the Liberals to start a culture war about Labor and the Greens joining forces to limit the liberty of religious schools.

In fact, the entire government objective is to avoid a battle. Albanese promised at the last election that he would act on the concerns about religious freedom, but he argues now that Australia does not need a divisive debate on religion when there is so much tension over antisemitism and Islamophobia.

The government has two draft bills, one to amend the Sex Discrimination Act and one to set up a new Religious Discrimination Act, but the documents may never see the light of day. While the Australian Law Reform Commission had worthy recommendations in a report issued on Thursday, there is not enough political goodwill to turn these ideas into law.

That is because the competing views on religious freedom are, in the end, impossible to reconcile. Many private schools want to be able to teach their faith and hire teachers who agree with their beliefs. Some want to keep the right to turn away a transgender student. That leaves no room for compromise with advocates for equality, who believe a religious school cannot sack a teacher because of his or her sexuality, and must not expel a transgender student.

Two meetings shaped this outcome. The first came several weeks ago when Albanese and Dutton met to discuss the possibility of a bipartisan agreement that would try to bridge at least some of the differences in the community. The second came on Monday this week, when they spoke on the government’s Boeing 737 as it flew from Canberra to the funeral of Jack Fitzgibbon in the NSW Hunter Valley.