Students' leadership qualities should not be tied to their sexuality, Acting Prime Minister Richard Marles says, as a major church group calls for the right to exclude gay pupils from roles such as school captain.
In a submission to a review of anti-discrimination laws, the Presbyterian Church of Australia argued for the right to exclude students from leadership positions if they were in a same-sex relationship or having pre-marital sex.
"They would not be able to give appropriate Christian leadership in a Christian school which requires modelling Christian living," the church said in its submission.
Mr Marles, the deputy prime minister, said while the government respected the views of people of faith, discriminating against children made him uncomfortable.
"We can't see a situation where we're inadvertently discriminating against kids," he told Nine's Today Show on Friday.
"Leadership and the qualities of leadership are not a function of people's sexual orientation and we need to make sure we have the widest pool of people for leadership positions across our society."
Queensland Youth Affairs Minister Meaghan Scanlon says it sends a message "of hate and division".
She said the Queensland government would not tolerate that behaviour in state schools, but noted Presbyterian schools were private.
"I do not think students should be punished for their gender identity or whether they are sexually active," she said.
"It has no bearing on their leadership ability."
The Presbyterian Church has more than 500 congregations across Australia and runs more than 20 schools and pre-schools, including prestigious private schools in Sydney and Melbourne.
Its submission was made to an Australian Law Reform Commission review of how federal anti-discrimination laws apply to religious schools.
The government has committed to ensuring religious schools cannot discriminate against students on the basis of their sexual orientation, gender identity, or relationship status.
It's also pledged to rule out discrimination against staff on the basis of their sexuality or gender while ensuring religious schools have the power to preference staff of their own faith when hiring.
Former deputy prime minister Barnaby Joyce said schools should be allowed to publicly put forward their views.
"It's a messy one. I just think that parents have a right to say, 'I had these values and I want the school to have these values because that's why I'm putting my hands in my pocket to pay money'," he told Sky News.
"If you go to a public school, and there are great public schools, they won't ask you those questions. There's always alternatives."
The commission's final report will be handed to the attorney-general on April 21.
