Melbourne should axe the Australian Grand Prix because it's too expensive and locals are fed up, federal parliament has been told.

Labor MP Michael Danby, whose Melbourne Ports electorate hosts the Grand Prix circuit, said he had polled 600 local residents about the Formula One race with a majority 10-1 opting to ditch the event.

He said Defence Minister Stephen Smith had confirmed the traditional F/A-18 fly over the Grand Prix would be scrapped this year.

Mr Danby said his constituents were sick of blocked road access during the Formula One race and the loud noises from cars, crowds and fly overs.

"The Grand Prix may have been a good deal in 1996 when it cost the government only $1.7 million but with falling crowd numbers and taxpayers footing a $15 million a year bill the state government should know to cut its losses and walk away," he told the House of Representatives.