The head of Australia's largest Muslim association has slammed claims by the country's immigration minister that recent terror attacks are the result of a 1970's decision to allow Lebanese refugees into Australia.

Minister Peter Dutton has claimed that many foreign fighters travelling to the Middle East are the offspring of those who arrived in Australia as part of former Prime Minister Malcolm Fraser's refugee policy following the outbreak of the Lebanese civil war in 1975.

Last week, he called the policy a "mistake", claiming that most people charged with terror-related offences in Australia are the offspring of those from Lebanon.

In a statement on the Lebanese Muslim Association's Facebook page Tuesday afternoon, Samier Dandan labeled Peter Dutton 's comments "racist".

"This willingness by the government to manipulate and exploit bigotry for political advantage is an insult to not only our community, but an insult to Australia's intellect," Dandan said.

"We will not be fooled nor bullied by opportunists willing to mistreat entire communities for political gain."

Opposition Labor MP Anne Aly expressed concern at Dutton's "overly simplistic" statements.

"[They have] racially profiled a group and tainted an entire generation and played to a nationalist rhetoric," Aly, Australia's first female Muslim federal parliamentarian, told Anadolu Agency.

Speaking in Parliament on Monday, Dutton repeated his comments, stating of the last 33 people who have been charged with terrorist-related offences, 22 were from second and third generation Lebanese-Muslim background."

In his Facebook statement, Dandan called the immigration minister's rhetoric "a shocking and twisted way to paint an entire community".

"Minister Dutton has taken a broad brush and downgraded them and their contributions, their very value as humans, to the violence associated with foreign fighters," he said.

"The same community that fled in the 70s and 80s fled from the very same violence Minister Dutton is seeking to protect Australia from."

Dutton's office told Anadolu Agency on Tuesday that the minister would not be responding to Dandan's words.

Opposition Leader Bill Shorten has issued a statement calling on Dutton to apologize.

"Enough is enough," Shorten said.

"Our hardworking migrant communities shouldn't have to tolerate this kind of ignorant stupidity and he needs to immediately apologize."

He called on Prime Minister Malcolm Turnbull "to show some leadership" and pull his minister into line.