With tears welling in her eyes and her voice breaking, the NT senator paid tribute to her five-year-old niece, who was found dead in scrubland near Alice Springs on April 30.
Jefferson Lewis, 47, has been charged with her murder and has yet to enter a plea.
The Liberal senator on Tuesday said: "We cannot continue hiding behind race".
"We cannot continue pretending that lowering expectations for Aboriginal children is compassion," Senator Nampijinpa Price said.
"It's not compassion, it's neglect. It's the racism of low expectations.
"Children deserve safety before ideology. Most of all, we need courage."
The senator's plea for action contrasted with that of outspoken independent senator Lidia Thorpe, who said the girl's family did not want her death to be politicised.
Senator Nampijinpa Price said she didn't want parliament to offer its condolences while "refusing to confront the conditions that made those condolences necessary in the first place".
"I want this parliament to put aside our political differences and stand up for what's right for our children," she said.
The death of Kumanjayi Little Baby, a name used in line with cultural traditions, sparked riots in Alice Springs as hundreds of people gathered outside the hospital where Lewis was taken by police.
NT police flew him to Darwin for his own safety.
Anthony Albanese told parliament that governments of all persuasions had not done enough to deal with generational challenges surrounding Indigenous affairs.
The prime minister expressed his condolences to the girl's family and community.
"This tragedy has shattered a family and shaken the community,'' he told the House of Representatives.
"The simple truth is that all governments of all persuasions over generations have not done enough to deal with what are generational challenges."
Every Australian child had the right to grow up safe with the security of a roof over their head, the opportunity of a great education and to be empowered to make the most of their potential, Mr Albanese said.Â
In the Senate, Minister for Indigenous Australians Malarndirri McCarthy paid tribute to the thousands of people who attended candlelight vigils across Australia in honour of the little girl.
The senator quoted a statement from the girl's mother, saying her heart was broken into eight million pieces over the loss of her "princess" who loved the colour pink, cuddling puppies and watching Bluey.
One Nation leader Pauline Hanson said the appalling setting where the tragedy happened was a national disgrace that shamed Australia.
"It should disgust us all that any Australian child is forced to live in such squalid and dangerous conditions in an obviously dysfunctional community," she said.
Senator Thorpe said the family had asked for their child's death not to be made a political football during their "sorry time".
"Not everyone has respected those wishes. We have seen damaging commentary and calls for reforms that would further harm our people," she said.
"We do need a national conversation that addresses the systemic failings that contribute to this tragedy and so many others like it, but this must be led by our people."
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