The Kiama councillor stood as the ALP candidate for the seat of Gilmore in 2007, 2010 and 2013, having joined the party in 2004.

"When I joined the party, John Howard had been re-elected and I believed his policies towards people who sought refuge in our country were inhumane," Cr Reilly said.

"Coming from a marketing background I thought I could support the party in future campaigns - as it turned out I was asked to stand at the 2007 federal election."

Cr Reilly said he felt Australian politics had become cruel and as a result the country had turned its back on a humanitarian crisis.

"The ALP are now just following the processes of the Liberal Party and they are better than that," Cr Reilly said.

"The Labor Party once stood up against an immoral war in Vietnam, it was an unpopular decision but one that was proven over time to be right and for that we can hold our heads high.

"Now is the time to stand up again and the current team are just not up to it."

At the 2013 election Cr Reilly reduced the Liberal Party's margin in the once safe Liberal seat of Gilmore to 2.65 per cent.

"Labor has made good ground in Gilmore and I am proud of my efforts and those that supported me," Cr Reilly said.

"I believe the next person that takes on [Gilmore MP] Ann Sudmalis will be successful - but it won't be me."

He rejected suggestions he should fight for his beliefs from within.

"When you fight as a member of a political party you have to accept what they believe in, but also hold your own values.

"When those beliefs don't align, you become a burden to the party and not true to yourself."

Cr Reilly also expressed disappointment at the recent state election campaign.

"I was very disappointed they changed leader at a crucial point, I don't think one leader was any better than the other, it was just a dopey move to change leaders for populist reasons," Cr Reilly said.

"Glen [Kolomeitz] was an excellent candidate for Kiama and he would have made a far better representative for the area than Gareth Ward but he was denied that opportunity by head office and different factions. I think Glen was misled by a team that was too cocky by half ... they followed a traditional choreography doing the same things they always do in the mistaken belief people will be excited by it, when they are not."

Cr Reilly said his decision to resign would have no impact on his role as a Kiama councillor.