Anthony Albanese has accused the Labor senator Fatima Payman of disrupting and undermining the government by vowing to repeat her vote for a Greens motions on Palestine, which he derided as a “stunt” and “indulgence”.

The prime minister suspended Payman indefinitely from Labor’s caucus on Sunday after an interview with ABC’s Insiders in which the Western Australian senator said she would again cross the floor if faced with another Senate motion to recognise the state of Palestine.

Fatima Payman crosses the floor to vote for motion to recognise Palestinian statehood – video

With a slew of cost-of-living measures taking effect from Monday – including revamped income tax cuts, $300 electricity rebates and an increase in the minimum wage – Albanese said he had decided to discipline Payman in part because of her disruption of the government’s message.

By taking part in the interview Payman “chose to … disrupt Labor and what we are doing today, the day before the most significant assistance that has been given to working people in a very long period of time”, the prime minister said.

Asked why Payman had been suspended, Albanese told ABC Radio: “Well, let’s be very clear – it’s not because of her support for a policy position that she’s advocating.”

Instead of talking about tax cuts and cost-of-living relief “you have seamlessly segued into the actions of an individual, which is designed to undermine what is the collective position that the Labor party has determined”, he said.

“No individual is bigger than the team. And Fatima Payman is welcome to return to participating in the team if she accepts [that] she’s a member of it.”

Albanese said Labor’s rules required that members vote in line with caucus decisions, in “a process where people participate, people respect each other and people don’t engage in an indulgence” such as Payman’s decision to cross the floor.

In question time, Albanese answered a Coalition question about the fact he had not expelled Payman from the party by arguing it is important for “social harmony … that we take temperature down in this debate, not seek not seek to inflame it”.

“By her own actions, Senator Payman has placed herself outside the privilege that comes with participating in the federal parliamentary Labor party caucus, and I informed her of that yesterday,” he said.

Last week the Greens and the Coalition joined forces to reject a proposed government amendment to the motion’s wording that embraced a “two-state solution” and, if accepted, would have allowed all Labor senators to vote for the motion.

Payman has been defended by Labor Friends of Palestine, who noted that the ALP platform contains a “commitment to recognising the legitimate aspirations of the Palestinian people for self-determination within a sovereign state”.

But Albanese said Labor “supports a Palestinian state existing onside alongside an Israeli state”.

“We don’t support a one-state solution,” he told the ABC. “The resolution moved by the Greens does nothing to advance the peace process. Pretending that the Senate recognises states is quite frankly untenable.”

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On Sunday Payman reiterated that she supported a two-state solution and that she believed Israel had a right to exist.

Australian parliament in chaos as Fatima Payman accused of ‘supporting terrorists’ – video

Albanese said he understood that Israel’s military action in Gaza after the 7 October Hamas attacks had resulted in a “very difficult period” for sections of the Australian community, including the Islamic community.

He added that this “is why we need actually real solutions, not gestures and stunts from the Greens”.

“This stunt from the Greens was designed to put Fatima Payman in a difficult position … It wasn’t designed to assist Palestinians in Gaza. It wasn’t designed to advance the peace process. And it was counterproductive.”

In a joint statement Muslim groups including the Australian Federation of Islamic Councils and the Australian National Imams Council said Payman had been punished for “voting with her conscience against genocide”.

“Her stance was a commitment to justice and the right thing to do,” it said, adding: “Australians and millions across the world demand decisive action in the form of sanctions and an immediate stop to weapons trade and training.”

The Muslim groups accused Labor abandoning the people it represents and allowing party politics “to dominate the voices of the people”.

Anne Aly, the minister for youth and early childhood education, said she hoped Payman remained in the Labor party.

“I fought long and hard to ensure that we have a diverse representation in our parliament,” she said on Monday. “I think our party is better for that diversity and I think our government and this parliament is better for their diversity.”

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