The Albanese government is facing its second wave of internal dissent in the space of weeks, as Labor politicians vent their dismay over a decision not to collect sexuality and gender identity data in the next census.

LGBTQIA+ advocates reacted with fury and disbelief when the government quietly confirmed on Monday it would not include a question on sexuality and expanded gender options in the 2026 edition of the national survey, contrary to a commitment in Labor's national platform. 

Six Labor MPs have since told the ABC the government should reverse its decision and include the new questions.

They include assistant health minister Ged Kearney, who said LGBTQIA+ census data should be collected to inform policymaking and support inclusion.

"The census not only informs policy and service delivery but paints a picture of modern Australia in all its beauty and diversity," she told the ABC.

"For too long LGBTQIA+ people have felt excluded from this picture … I'm working to ensure these views are represented within the Albanese Labor government."

Ms Kearney's intervention, which carries added weight given her role in the Albanese ministry, comes as she faces an electoral challenge from the Greens in her inner Melbourne seat of Cooper.

"As the member for one of Australia's most inclusive electorates and a long-term supporter of queer liberation, it is important I speak on this issue," she told the ABC.

Labor backbenchers Josh Burns, Alicia Payne, Michelle Ananda-Rajah, Jerome Laxale and Peter Khalil have also told the ABC they oppose the government's decision, coming just weeks after a similar wave of backbench frustration over gambling reform.

Mr Burns, whose seat of Macnamara is a key electoral battleground with both the Greens and the Liberal Party, was the first to speak, telling the ABC's Afternoon Briefing on Thursday that a census question would tell the LGBTQIA+ community "that you count and that you matter."

"I was really proud to campaign for a party that looked to include the LGBTQ community."

Ms Ananda-Rajah told the ABC the census question was "a human rights issue".

"It is core Labor business to ensure that we have an inclusive country where everyone is seen and heard," she said.

Several Labour sources told the ABC there were broader frustrations within the party, including among those who felt unable to speak publicly.

Frontbenchers say Dutton 'nastiness' the motivation

Prime Minister Anthony Albanese is attending the Pacific Islands Forum and has not commented on the matter, but frontbenchers Jim Chalmers and Richard Marles said the decision was made to avoid "nastiness" and a "divisive debate."

Disgruntled Labor MPs in public and in private have acknowledged the legitimacy of that concern but said it should not deter the government from honouring its promise.

In a post on X, Peter Khalil said he wanted the questions included "on balance" but added he could "completely understand the rationale … There are bad actors who can't help themselves and are always looking for ways to divide our nation."

On Thursday, Opposition Leader Peter Dutton declared the questions reflected a "woke agenda" and added the current questions had "stood us well as a country."

But several members of the Coalition's shadow ministry told the ABC the opposition had not planned to campaign on the census or even registered it as an issue until the government raised it.

"I think they're jumping at their own shadow," said one senior shadow frontbencher.

"I am genuinely flabbergasted. What were they trying to avoid? I don't know why they thought it would be such a big debate … It would be a weird thing to pick a fight on."

Liberal MP Aaron Violi said on Wednesday gender identity and sexuality were "an important data point and part of our community conversation."

"This is quite hurtful and damaging to a lot of people in the community," he told the ABC's Afternoon Briefing.

"For a prime minister that wants to bring people together, this is really divisive and causing a lot of pain in the community."

A second member of the Albanese government ministry who asked not to be named told the ABC even the prospect of a divisive debate was not a reason to create "bewilderment and distress" in the LGBTQIA+ community.

"It's fair enough to be wary and there are times when that's a sensible thing, but you have to check in on some level on the possibility you're self-censoring or you're allowing something to be left undone rather than taking it on."

Labor risks damage among progressive voters

While some inside the federal party believe the prime minister may reverse the decision in the face of public pressure, there are fears the handling of the matter could do lasting damage to the government's standing in several seats where it faces a Greens challenge.

Greens leader Adam Bandt named Ged Kearney's Cooper, Peter Khalil's Wills and Josh Burns' Macnamara as three of five seats he believed the party could win at the next federal election.

The census issue also compounds backbench angst over the party's reluctance to embrace a total ban on gambling advertising, as advocated by the late Labor MP Peta Murphy.

"We won the election, we're in government: govern," said one MP.

"Equality is non-negotiable. Don't be timid."