Opposition Leader Bill Shorten insists Labor has high standards for preselection despite losing a candidate with links to a senior member of the extremist Islamic group Hizb ut-Tahrir.
Christian Kunde, who was standing against Health Minister Sussan Ley in the NSW regional seat of Farrer, has stepped down in the interests of the party.
His decision followed a report he had supported Hizb ut-Tahrir spokesman Uthman Badar and delivered a lecture comparing gay marriage to incest.
"I am not homophobic and I believe in Australian democracy," Mr Kunde said.
"I disagree with the way my comments are being reported, in fact, this distortion is exactly what I have warned about."
Mr Shorten said as soon as he was made aware of the issue, the candidate's resignation was accepted.
"We have high standards," he told reporters in Perth.
Labor frontbencher Penny Wong said it was appropriate Mr Kunde resigned.
"Regrettably, these things happen in a federal election," she told ABC radio.
Senator Wong pointed out that Liberal Party candidates had also made extraordinary statements.
It's the second candidate Labor has lost in controversial circumstances, after union official Chris Brown was dumped from the seat of Fremantle for failing to disclose 30-year-old criminal convictions.
