Opposition Leader Bill Shorten believes a move towards a republic should be progressed alongside a treaty with Australia's indigenous people.
Speaking to Sky News on Sunday from the Northern Territory community of Barunga, Mr Shorten said the country needs to move towards getting an Australian head of state.
"I think it's remarkable that over two centuries after first European settlement we are still borrowing a very worthy person but a monarch from another country," the Labor leader said.
The Australian Monarchist League warned Mr Shorten is making a "huge blunder".
"Support for a treaty and support for a republic derive from two entirely different sectors of the community," its national chair Philip Benwell said in a statement.
"Previous Labor leaders have recognised that approximately one-third of Labor voters are monarchist and conservative traditionalists."
He says this was seen in the 1999 referendum with traditional Labor vote against a republic and more recently with the high no vote in Labor electorates in the same-sex marriage postal survey.