The Queensland corruption watchdog has described remarks made by Premier Annastacia Palaszczuk as exposing her to the prospect of a charge of bribery of a member of Parliament.
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The Crime and Corruption Commission was investigating a complaint against the Premier and members of the LNP by Katter's Australian Party Queensland leader Robbie Katter over the removal of extra taxpayer-funded staff from his party.
The furore began over calls for the Queensland branch to denounce a speech made by KAP Senator Fraser Anning, who used the Nazi-associated phrase "final solution" while criticising Muslim immigration.
In Queensland Parliament on August 22, LNP member for Warrego Ann Leahy asked if Ms Palaszczuk would tear up Labor's agreement with KAP for five extra staff in light of Mr Anning's speech.
The staffing deal was granted in 2015 during negotiations with the Palaszczuk administration to form government.
During question time, Ms Palaszczuk said she wanted members of KAP to publicly condemn Mr Anning's comments.
"I can say that I will be reviewing that arrangement [for extra staff] as well," she said.
On August 23, MPs from Labor and the LNP denounced Senator Anning's speech during a motion in Parliament acknowledging the dismantling of the White Australia Policy, with the opposition questioning the extra staffing provided to KAP.
At the Labor state conference earlier this month, Ms Palaszczuk announced she would rip up the staffing deal.
In a statement, the CCC said the state government had the right to allocate and withdraw staffing resources from KAP.
It found there were no grounds to suspect that anything said or done inside or outside Parliament by Ms Palaszczuk or members of the LNP involved an offence of interfering with political liberty or extortion.
CCC chair Alan MacSporran cleared LNP members, including Ms Leahy and opposition leader Deb Frecklington, and said they were acting to hold the government to account.
However, the CCC said the information available, if proved, may involve an offence against section 60 - bribery of a member of Parliament - regarding the answer given by Ms Palaszczuk to Ms Leahy.
"The Premier's answer allegedly contained an implied threat to withdraw KAP staffing resources with the intent to influence KAP parliamentary members in their vote and opinion upon a question arising in the Legislative Assembly," the statement read.
"The Premier's answer could be admitted in proceedings against her to the extent necessary to prosecute an offence against section 60."
However, the CCC did not consider section 60 was intended to apply to statements made openly during parliamentary proceedings.
"Even though the answer given by the Premier during question time might be considered to be entirely inappropriate and to have exposed her to the prospect of facing a charge of bribery under section 60 of the Criminal Code, the fact remains that there was no objection from anyone present during the parliamentary debate, and no censure from the Speaker [Curtis Pitt]," the CCC's statement said.
The motion was passed with an overwhelming majority of MPs and was conducted openly in Parliament, the CCC said.
Mr MacSporran said section 60 was designed to prevent and punish conduct which sought to secretly influence the votes of MPs by inducements, threats and intimidation, describing this case as "very unusual".
The CCC said there was no reasonable prospect of a successful prosecution and the Queensland Parliament was the appropriate entity to deal with the complaint against Ms Palaszczuk.
The CCC also said it was of the view that the process to decide resourcing for ministers and other MPs should be determined by an entity independent of the government of the day, and recommended the Parliament consider the matter.
The Parliament, where Labor has a majority, can decide to refer the issue to the Ethics Committee to consider an issue of contempt or refer it to the Attorney-General for prosecution.
Mr MacSporran said there should be an independent, bipartisan body within the Parliament to objectively address resources.
"The allocation of resources to elected members of Parliament is a fundamental plank in a democratic system," he said.
"If you're interfering with the resource allocation it is a very disappointing outcome."
Ms Palaszczuk said people made comments "in the heat of question time".
"That's the argy-bargy of Parliament," she said.
However, Mr MacSporran said robust parliamentary debate was important but there were limits as it was not "open slather".
"It'd be a very odd case whether you could be rightly judged to be guilty of a criminal offence by something you stood up and said in Parliament in a debate, but it's not without its possibility," he said.
Ms Palaszczuk said she had not seen the information from the CCC but she was happy to look at any recommendations about resourcing arrangements.
"Those processes have been in place for decades, so if it's time to have a review, more than happy to look at that," she said.
