The Liberal candidate for the marginal New South Wales federal seat of Gilmore, Warren Mundine, says he is extremely insulted by comments from Labor candidate Fiona Phillips telling him to go back to where he came from.

Key points: Warren Mundine has hit back at his rival in the seat of Gilmore Fiona Phillips

Warren Mundine has hit back at his rival in the seat of Gilmore Fiona Phillips Ms Phillips described Mr Mundine as a phony

Ms Phillips described Mr Mundine as a phony The Labor candidate says she is standing by her comment

In a commercial news television interview Ms Phillips said Mr Mundine was a phony and he needed to go back to where he came from.

Mr Mundine, who was handpicked by Prime Minister Scott Morrison to run in the seat, said no one deserved to be spoken about like that.

"To tell an Aboriginal person to go back to where they come from is one of those right-wing crazy things," Mr Mundine said.

"Obviously she doesn't understand Aboriginal culture or kinship, this is my maternal ancestors' country.

"Everyone talks about the name Mundine. Of course the name Mundine comes from the north coast [of NSW], but they are forgetting I also have a mother and my maternal side is from this country and goes back thousands of years, so I am returning to my ancestral home."

Mr Mundine said he would like her to apologise.

"I am generous about the whole thing, I am not calling for her to be sacked, or people to attack her, she should apologise, and show respect."

No apology needed: Fiona Phillips

The Labor candidate for Gilmore Fiona Phillips, with a constituent at her Nowra Show stall in 2015 ( twitter.com )

Ms Phillips said she was standing by her comments.

"This has nothing to do with the land of the Yuin Nation, Australia is and always has been First Nation's land.

"What I have said is Mundine has rolled into town from Sydney's leafy north shore."

She said she has no remorse in using the term and does not feel she needs to offer him an apology.

"I'm clarifying what I said and I am happy with that."

This week, the United Australia Party candidate for Gilmore, Milton Leslight also highlighted his belief that Mr Mundine was not a local candidate.

Mr Leslight said despite his initial inclination to do preference deals with locals, he would accept his party leader Clive Palmer's decision and put the Liberal's Mr Mundine at number two on his how to vote cards.

"Yeah I'd prefer to see a different person as a second, because with no reflection on Warren, he is a nice guy, but he hasn't really been a local, he is not that connected to the local community but what we must do is think about the best interests of Australia."

While at an event in Cowra, Nationals leader Michael McCormack told party members he also believed Mr Mundine was not considered a local in Gilmore.

"The Libs have parachuted Warren Mundine in from the eastern suburbs of Sydney despite the fact the Liberals pre-selected at a local level Grant Schultz," he said.

Mr Mundine said in the political game people make statements and take advantage, but Ms Phillips' comment was offensive.

"You didn't see Michael McCormack and you didn't see Milton Leslight abuse me, that is what Fiona Phillips did."