"More than a million dollars was spent on this single piece of art, commissioned by an artist who doesn't live in Queensland or Australia for that matter.''
She said it was not a smear on the artist or the sculpture itself, but the funding would have been better spent helping the Queensland arts sector.
The transportation from Auckland and installation of the piece was estimated to cost more than NZ$252,000.
"Unfortunately, the advice I've received is there's no way I can reverse the decision at this late stage so Queenslanders must foot the bill,'' she said.
The sculpture is due to be shipped from Auckland later this month, and installation is expected to start on November 14.
In November last year the Premier of Queensland's Sculpture Commission selection committee voted unanimously to use Mr Parekowhai's sculpture.
The water rat is the area's native rat, known as the kuril, and the sculpture is said to represent the kuril as the caretaker of the site, who up-ends the elephant with its cultural and intellectual weight.
At the time the sculpture was chosen, Queensland Art Gallery director Tony Ellwood said the sculpture successfully drew connections between the river, the Gallery of Modern Art and the State Library of Queensland, "And is simultaneously contemplative and humorous. The artist's representation of cultures coming together is at the core of what art galleries aim to do.''
Art commentator Hamish Keith said Mr Parekowhai was a very fine and innovative artist.
"Good luck to Queensland. They're getting a remarkable work.''
It was very common for MPs, both in New Zealand and Australia, to object to expenditure and "ought not to be taken seriously,'' he said.
They were getting the artwork for a bargain price, and Queensland was lucky to have an artwork from one of New Zealand's best performing contemporary artists.
"I would feel very upset if we lost the artist, but we don't mind giving them an artwork. There's plenty more of Michael Parekowhai where that one came from.''
Mr Parekowhai is a Porirua-born artist who now works as an Associate Professor at Auckland's Elam School of Fine Arts. In 2001 he was made an Arts Foundation of New Zealand Laureate and last year represented New Zealand at the Venice Biennale.
A spokesman for the Gallery of Modern Art said it was not making any comment about Ms Bates' comments, and referred questions to the minister.
Calls to the minister's office were not immediately returned.
