Queensland Premier Annastacia Palaszczuk will withdraw the generous staffing arrangements made for Katter's Australia Party MPs in the Queensland parliament following a speech made by KAP senator Fraser Anning.
Senator Anning sparked public and political backlash when he used the Nazi-associated phrase "final solution" during his inaugural parliamentary speech criticising Muslim immigration.
Ms Palaszczuk told the Labor state conference in Brisbane on Sunday she would no longer fund the extra staff after the KAP failed to denounce the senator for his remarks.
"We have the right to free speech in our parliaments, but that free speech is not free of consequence," she told party faithful.
"So because his party will not denounce Senator Fraser Anning, I denounce his party."
Senator Anning's remarks were backed by federal KAP leader Bob Katter and his son and leader of the Queensland KAP Robbie Katter.
Ms Palaszczuk had promised a "review" of the special arrangement which allows the three KAP MPs five more staff than usually allocated.
"I am withdrawing the additional staff I granted to Katter's Australian Party because it tolerates the intolerable and it defends the indefensible, and senator Fraser Anning's statements are indefensible," she said on Sunday.
Liberal National Party Deputy Leader Tim Mander claimed the government had to be shamed to take action against KAP, and called on Labor to put the party last on how to vote cards in north Queensland.
The Palaszczuk government had a close working relationship with the Queensland KAP in its first term, relying on its two votes when Labor was in minority.
Robbie Katter says Senator Anning's words had been twisted and taken out of context.
Senator Anning, who defected from One Nation to join KAP immediately after taking his Queensland Senate seat, has refused to apologise for any offence caused.
