Mr Mundine insists his third party will be his last, having cut ties with the Liberal Democrats, the minor party led by controversial libertarian David Leyonhjelm.

Asked whether he was now Liberal for life, Mr Mundine told the ABC's Radio National: "Of course".

Local party members quit in disgust after he was endorsed as the candidate for Gilmore on Wednesday.

Prime Minister Scott Morrison said he intervened in pre-selection for the Liberal-held seat and dumped candidate Grant Schultz because he undermined sitting MP Ann Sudmalis.

Mr Mundine said he understood Mr Schultz's "devastation" because he had been thwarted in his attempts to enter parliament for Labor.

Shadow treasurer Chris Bowen criticised the decision to run Mr Mundine, suggesting he should live in the seat.

"I think the people of Gilmore are entitled to say, 'well if you cared so much about us you might have lived here'," he told the ABC's Radio National.

The indigenous leader fired back, describing Mr Bowen as a "very smart man" who didn't understand the relationship Aboriginal people had with country.

"This is my ancestral home," Mr Mundine said.

He intends to rent before buying a farm in the electorate, with his son to work on the land.

"Win, loss or draw we are going to buy property down here," Mr Mundine said.

The new Gilmore Liberal candidate also rebuffed concerns he may be ineligible to sit in federal parliament because one of his businesses received government contracts.

Mr Mundine said he would sit down with lawyers and accountants on Thursday to transfer his business interests to ensure he is not in breach of the constitution.

AAP