The Cancer Council of Queensland has retracted its claims donations would be under threat under Labor's franking credits policy, as Treasurer Josh Frydenberg uses the charity as an example of the unintended consequences of the $5 billion a year policy.

In a submission to the House economics committee on Wednesday, chief executive Chris McMillan said she "took full responsibility for the error" and requested its original submission be withdrawn from the public record.

She said the submission was in breach of the Cancer Council's charter, was not done in consultation with the national body and did "not reflect the position of the Cancer Council federation."

Treasurer Josh Frydenberg with the original letter from the Cancer Council on Wednesday. Credit:Dominic Lorrimer

The submission, which warned the charity's work preventing cancer would be put at risk under the changes, has been used by the Morrison government and retirees to protest against the measures that will strip tax refunds from 800,000 shareholding retirees who have not paid tax.