Sex Discrimination Commissioner Anna Cody expressed her disappointment and wanted it reconsidered, saying the decision carried "serious implications for the health, wellbeing and general equality of LGBTIQA+ Australians and their families".
"For LGBTIQA+ people, who face significant health disparities compared to the heterosexual and cisgender population, accurate population data would ensure that informed decisions can be made," she said.
Labor had pledged to count the queer community and agreed data relevant to LGBTQI Australians was needed but has since abandoned the proposed change to the census.
The Australian Bureau of Statistics - which runs the census - had also apologised for not including sexual orientation in the 2021 snapshot and determined to invest and support the LGBTQI community "to fully participate" in the next one.
Following the backflip, Dr Cody expressed worry "rising negative rhetoric" would be harmful to LGBTQI people and their families.Â
"I'm concerned that this decision will strengthen the voices of discrimination and division that seek to disrupt the nation's social cohesion," she said.
Labor MP Graham Perrett has defended the government's census decision. (Mick Tsikas/AAP PHOTOS)
Labor MP Graham Perrett said while he had not seen any proposed questions, the opposition leader would politicise the issue to attack the government.
"Peter Dutton can weaponise anything that bespeaks a modern Australia," he told AAP.
Mr Dutton has been contacted but has previously rejected accusations he was a "divisive" leader.
Crossbenchers have added their voices to a growing chorus of discontent, signing a joint letter to the prime minister to reverse the decision.
"This decision has left people in the LGBTIQA+ community feeling excluded, demeaned, and angry. They are being denied the basic right to be recognised and valued," the crossbenchers wrote.
Independent senator David Pocock said he was at "an absolute loss as to why the government would reverse course on a commitment from last year to build a better, more inclusive picture of our community".
Senator David Pocock has backed in calls for the census questions to be updated. (Lukas Coch/AAP PHOTOS)
"This decision exacerbates the hurt already felt by many LGBTI Australians following the last census and I just don't understand why the government would raise expectations only to let them down," he said.
Treasurer Jim Chalmers doubled down on the decision, saying the government wanted to "avoid some of the nastiness ... in the lead up to the census".
"The census is still a couple of years away and our focus has been on other things, including the cost of living," he told ABC radio on Thursday.
But LQBTQI communities argue they already face a divisive debate and are being treated as a political football.
"We know at times we have to trade on those divisive debates for us to be able to progress," LGBTIQ+ Health Australia chief executive Nicky Bath told AAP.
Surrounded by divisive debates, it was "even more distressing" when the conversations were being had for no gain, she said.
To assume all Australians would be angered by simply acknowledging the queer community in the census was "insulting", Equality Australia CEO Anna Brown said.
About one in 10 Australians identify as being lesbian, gay, bisexual, trans or gender diverse, the federal health department estimated in 2019.
These Australians are disproportionately worse off in mental health, drug use and rates of sexual, family and domestic violence.
