The hotel says it gave Bieber permission to do it, but Gold Coast Mayor Tom Tate says it just encourages other teens to do the same elsewhere.
Tate wants Bieber to "get down there and remove this graffiti off our main road." The issue came to light when Bieber posted pictures of the graffiti online.
The QT Hotel says Bieber was an excellent hotel guest and said it wanted to promote graffiti as an art form.
"It was a coup for the hotel to have Justin want to paint a piece of art in appreciation of his stay," the hotel said in an emailed statement on Friday. "This piece of art is now available to be viewed by fans of the artist and we believe that it is a wonderful addition to the colorful Gold Coast arts scene."
The Associated Press contributed to this report.