Labor has announced Brian Owler will be its candidate for the Sydney seat of Bennelong at the next federal election.

Key points: The new candidate for Bennelong is the former president of the Australian Medical Association

The new candidate for Bennelong is the former president of the Australian Medical Association Labor's former candidate Lyndal Howison withdrew from the race to make way for Dr Owler

Labor's former candidate Lyndal Howison withdrew from the race to make way for Dr Owler The Liberal Party hold the seat on a 4.8 per cent margin

Doctor Owler is a neurosurgeon and the former president of the Australian Medical Association (AMA) and lobbied strongly against the Abbott Government's Medicare co-payment in 2014.

Labor's former candidate Lyndal Howison wrote to party members this morning, telling them she had withdrawn from the race to make way for a better candidate who would "give us the best chance of delivering a Labor government at the next federal election".

Federal Labor Leader Bill Shorten announced Dr Owler's candidacy this morning.

"Mr Medicare is coming to Canberra to make sure that we put Medicare and health care right up the top," Mr Shorten said.

Dr Owler said running had been a difficult decision but that "this is a time people need to step forward".

"I come from a fairly modest background but my parents worked hard, I worked hard and through the opportunities of education I was able to become a doctor and a neurosurgeon," he said.

"I know that the hard-working people of Bennelong want the same opportunities for their children."

Dr Owler said Labor would protect Medicare and implement "responsible policies" on climate change.

He said the "division" recently seen within the Coalition may be what he needs to win the electorate.

A slipping margin

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Bennelong was a Liberal stronghold, and held by former Prime Minister John Howard for 33 years, until Labor candidate Maxine McKew sensationally wrestled the seat off him in 2007.

Former tennis pro and Liberal MP John Alexander went head-to-head against Ms McKew in 2010 and won the seat back.

He held it until last year, when he resigned from Parliament and had to recontest the seat after it was revealed he was a dual citizen.

At the subsequent by-election, he defeated high-profile Labor candidate Kristina Keneally — a former NSW Premier.

Former Prime Minister Malcolm Turnbull and John Alexander celebrating the Bennelong by-election win last year. ( ABC News: Marco Catalano )

However Mr Alexander's margin was halved and the Liberals now hold Bennelong by only 4.8 per cent.

Speaking at a press conference on Tuesday afternoon, Mr Alexander said he would run at the upcoming election on the record he had established "over eight years".

He highlighted the creation of a small business plan in the community as one of his successes and also raised the threat of a Labor candidate pushing down house prices.

"We (the Liberal Party) have worked very hard to engage with the community, to understand the problems," he said.

"Regarding housing affordability, Bennelong has had the biggest uplift in property prices in Australia, 100 per cent in five years, 74 per cent in three years, it is a volatile market.

"If Labor were to win the next election, the people who would suffer most in the downturn of the value of their homes or the investment in real estate would be here in Bennelong."