A 43-year-old man who allegedly yelled anti-Islamic comments at a family picnicking at Bulli Tops will face court on Monday.
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About 12.45pm on Sunday, police were called to Bulli Tops Lookout on the Princes Highway, following reports a man had verbally abused a large family group, who were picnicking at the location.
Police were told the man then got into his car and drove circles around the group, which included young children, before driving off.
Witnesses reported the man had made racially bias-related threats and anti-Islamic statements throughout the incident.
As officers from Wollongong Police District arrived at the location, the man returned, and was driving around the car park when he was stopped and arrested.
During a search of the man's vehicle, police located and seized a hammer and a boxcutter.
The man was taken to Wollongong Police Station and charged with intimidation and drive in a dangerous manner. He was refused bail.
Wollongong Police District Commander, Superintendent Chris Craner, said police do not tolerate any behaviour that disturbs peace in the community.
"There is no place for any type of intimidation, abuse, or violence ... and I encourage the community to contact us to ensure every instance can be investigated," Supt Craner said.
"The safety of the community is our priority, and the NSW Police Force continues to work closely with all community groups to make sure not only are they safe - they feel safe."
Supt Craner urged anyone who witnessed the incident and has not yet spoken to police to come forward.
"In particular, we'd been keen to speak with anyone who has dashcam or mobile phone vision," Supt Craner said.
"Information can even be provided confidentially through Crime Stoppers."
Anyone with information that may assist investigators is urged to contact Crime Stoppers: 1800 333 000 or is treated in strict confidence. The public is reminded not to report crime via NSW Police social media pages.