Senator Malcolm Roberts on Tuesday told the Senate section 18C of the Racial Discrimination Act silenced citizens from reporting terrorists and instances of pedophilia.
"We want to be able to call out Muslim drug dealers, child mutilators, hate-preachers, terrorists and perverts,” Senator Roberts said.
However Senator Dastyari told SBS the government had to take some responsibility for Senator Robert's comments, because he said it started political debate around the Racial Discrimination Act.
Senator Malcolm Roberts on 18C
"What we have had now as a nation is a debate over several weeks over how much more racist we should be as a society, and I think it is, and it was always going to, lead down some dark and dangerous paths," Senator Dastyari said.
"Frankly the government has to take some responsibility for creating a debate about racism that we didn't need and don't want."
Senator Dastyari said One Nation was in a "downward spiral" of trying to be as "offensive as they can be".
"I think they are very dangerous and hurtful comments, but fundamentally they are also a little bit unhinged," he added.
During a Senate debate regarding changes to 18C on Wednesday, One Nation leader Pauline Hanson said she had been the victim of racism and had chosen to not let it affect her.
She recalled an incident meeting with Aboriginal elders in 1996.
"When I approached the elders, they called me 'white trash, a pig in mud' and I was abused. So I just turned and walked away," she said.
Watch: "There is reverse racism in Australia": Hanson on 18C
'Where is it going to stop?'
Adel Salman, vice president of the Islamic Council of Victoria, said it was extremely concerning comments like these were becoming common in the public discourse.
"The dial keeps moving every day towards more and more extreme and outrageous speech. Where is it going to stop?" he told SBS.
"What more needs to be said to shock the rest of Australian into saying ‘enough is enough’? This type of speech is not appropriate for a society like Australia."
Mr Salman said he believed One Nation was responsible for creating more social disharmony in Australia towards Muslims and encouraging public hostility and harassment.
"In the past they (comments like this) were seen as fringe, extreme and they were dismissed … But now these extreme hateful views are part of the mainstream public discourse," he said.
Tasneem Chopra, chairperson of the Australian Muslim Women's Centre for Human Rights said she was increasingly concerned about the tone of the political discourse.
"It is disappointing we aren't seeing a stronger counter-response from leadership," she told SBS.
"When you don’t see that strong counter-response, you basically say to racists its open slather with impunity."
When One Nation leader Pauline Hanson called for a ban of all Muslims entering Australia, after the attack at Westminster in London earlier in March, Prime Minister Malcolm Turnbull said her comments were "dangerous".
One National leader Pauline Hanson has called for the Muslim faith to be banned. Source: Twitter
"The object of the terrorist, the Islamist terrorist, is to get the broader society to turn on Muslims at large," Mr Turnbull told 3AW radio at the time.
"Inciting hatred against any part of the Australian community is always dangerous. It undermines the mutual respect that we have in our community".
