Toiling on a construction site or in a mine apart can result in a deadly lung disease that a new parliamentary report is urging the NSW government to take seriously.

Found in soil, sand and granite across many industries, silica dust is small enough to penetrate deep into the lungs and cause irreversible damage known as silicosis.

Even though fatal at times, it is preventable if health and safety measures are adequately implemented, according to the review of the Dust Diseases Scheme.

The report, released on Friday, made 12 recommendations including for the government to introduce a licensing scheme to ensure manufactured stone businesses have strict controls for working with a potentially dangerous substance.

The report also called for a more rigorous regime of random on-site inspections where manufactured stone is being installed.

The committee further noted an outright ban on manufactured stone should be instituted if no significant industry improvements are made in the next two years.

The Dust Diseases Scheme is currently paying about $120 million in entitlements to workers and dependants each year.

There are about 1300 workers currently in the scheme, with around 300 new cases each year.

The report noted participants in the inquiry were "underwhelmed by the government's response" to the recommendations of a 2019 review of the scheme.

About 15 per cent of cases of lung cancer could be prevented if asbestos, silica, diesel exhaust and welding fume exposure were reduced in workplaces, the Australian Council of Trades Union said on Friday.

The Australian Workers' Union estimates 600,000 Australian workers are currently exposed to silica dust from tunnelling, quarrying, cement work to mining and construction.

The AWU warned earlier this year that "a tsunami of silicosis" would be recorded in coming years if preventative measures are not enforced by governments.