Secretly recorded calls can be used by the corruption watchdog and police under a push to strengthen their investigative powers.
Those who obtain copies of illegally recorded conversations, but are not involved in their making, could soon share them with the Independent Commission Against Corruption (ICAC) or NSW Police without fear of punishment.
This is already a temporary exemption for the NSW corruption watchdog, but the government's legislation would enshrine it in law and expand it to other investigative bodies.
NSW Attorney-General Michael Daley said the change will aid investigations by allowing bodies like ICAC to receive and rely on evidence it would otherwise be impossible for them to use.
"This reform has been carefully designed to aid investigations into suspected criminal or corrupt conduct while maintaining important privacy considerations," he said.
Anyone who records a private conversation without consent continues to risk fines up to $11,000, jailed for 5 years, or both.
But this exemption means those who have the recording but did not create it, will be protected if they hand it over promptly.
The measure was first given to ICAC in 2023 during a probe into the alleged stacking of a Liberal-held Sydney council in order to influence planning decisions linked to developer Jean Nassif.
Back then, the opposition attempted to wind back the powers, limiting them to one investigation over concerns it would give the commission "open slather" to use any illegal recordings it obtained.
It is yet to decide on a position over the latest reforms.
"The bill will be considered by shadow cabinet once it has been introduced in parliament," Opposition Leader Mark Speakman said.
According to the NSW government, the changes follow consultation with investigative agencies, legal experts and privacy groups.
It says similar powers are already in place for the ICAC's counterparts in Western Australia, Victoria and the Northern Territory.
