Police and the Ministry of Justice are considering new ways of recording crimes in an effort to combat racism.
But concerns have been raised over suppressing New Zealanders' right to free speech.
Unlike in the UK, hate crime is not a specific offence in New Zealand.
They are coded under existing crime categories but police have started consulting with community leaders to consider the pros and cons of recording the data separately.
The consultation is taking place via the Police Commissioner's Maori, Pacific and ethnic advisory forums.
"Police take all reports of crime seriously, especially when the actions of individuals attack a person or group of people directly," a spokesman told the Herald on Sunday.
"The changing demographics in this country has required police to seriously consider a wider discussion which focuses on the rights of individuals to be safe and feel safe regardless of who and where they come from."
The Sentencing Act does consider hate as an aggravating factor when sentencing offenders, a position that police supported.
Meanwhile the Ministry of Justice has started surveying 8000 New Zealanders on their experiences of crime, including whether they feel they were targeted on racial, religious or sexual grounds.
While the term "hate speech" is not referenced in New Zealand legislation there are existing laws which do cover some conduct which could fall within its description.
The Human Rights Act already includes provisions that cover both civil and criminal liability in relation to incitement of racial disharmony. However, there is a extremely high threshold - which in some instances requires the consent of the Attorney-General - before a prosecution can be laid.
The Harmful Digital Communications Act provides similar protections.
Attorney-General David Parker along with Justice Minister Andrew Little said earlier this year that a proposed change to the Bill of Rights would see Parliament required to review a law if the courts declare it to be inconsistent with the law.
The Human Rights Commission said it was "fully supportive" of the proposed changes.
It acknowledged concerns about the adequacy and extent of current legislation.
"Freedom of speech and expression are really important human rights. But most rights are not absolute and we also have to remember that with rights come responsibilities," a spokeswoman said.
"We need to make sure our laws strike the right balance between protecting the right to freedom of speech and appropriately ensuring that we protect the right to personal security and safety so that people do not suffer actual harm.
"We are not talking about hurt feelings or offence, but situations at the very serious end of the spectrum where serious damage or injury is caused."
But civil liberties advocate Thomas Beagle said sometimes democracy could be painful and any new hate speech laws should promote more and better speech rather than suppress it.
Beagle, the chairperson for the New Zealand Council for Civil Liberties, said freedom of expression should improve communication and ideas, "not just ensure that we can all shout abuse at each other".
He said while the council did not have an absolutist view it has long campaigned for the Bill of Rights to wield greater power in the courts.
"For example we support, with caveats, current New Zealand censorship law, the court's ability to suppress information to protect victims of crime, and the laws we have against harassment.
"However, we also believe that any form of censorship or control of speech should be minimal and as infrequent as possible."
He wanted free speech in New Zealand to be genuinely free, even when those views may be unpopular or vilified by others and even when it offends.
"It wasn't that long ago that advocating for equal rights for homosexuals was outrageously radical... but the arguments for equality and fairness won in the end.
"I think we should recognise that the debate was frequently unpleasant and that some people undoubtedly suffered because of it - democracy can be painful.
"We need to ensure that it can't be used to suppress views that are merely radical or unpopular, or that are supported by the wrong people."
Labour MP Louisa Wall said it was important to hold people accountable for their influence and status in society.
Earlier this year, Wall lost a High Court appeal against a Human Rights Review Tribunal decision.
The appeal focused on two newspaper cartoons by Fairfax Media, now Stuff, which she said promoted racial disharmony.
"I actually think we need a duty of care law added to the Bill of Rights," she told the Herald on Sunday.
"A duty of care would place a legal obligation on a newspaper for example or an individual [such as] a professional sports star requiring adherence to a standard of reasonable care while performing any acts that could foreseeably harm others."