Party spokesman Jim Saleam said the party was planning to contest at least one ward and was now choosing candidates.

The party entered candidates in the 2004 local government contests at Coffs Harbour, Marrickville, Newcastle and Sutherland.

"We didn't actually campaign in Marrickville. I simply put my name down there as a provocation," Dr Saleam said.

"We ran a candidate in Sutherland's B ward and didn't pull a massive amount of the vote."

Dr Saleam said this year's campaign would be as "extensive" as the party could reasonably make it.

"We will be confronting the multicultural policies of the council," he said.

Dr Saleam said the country's most pressing concern was population control and every effort should be made to cap Australia's population, including cutting immigration.

He said people who came to Australia from other countries often left again and they should not be "replaced", which would allow some room for Australia's birth rate without increasing the total population.

Dr Saleam said that by joining local government, the Australia First Party could "use every power and technique available" at that level to mount an obstructionist campaign against the higher levels of government.

"We perceive this as almost a political guerilla war," he said. "The desalination plant is linked to Morris Iemma's target of 6million people in Sydney by 2040. That would make the shire virtually unliveable."

Mayor David Redmond dismissed the party's ambitions.

"It appears to me they are very much a single-issue party," he said. "The matters that come before council on a daily basis are pretty broad. A councillor should be able to speak and deal with any member of the community."