The Victoria-based 'Rise Up Australia' party, however acknowledged that the move could provoke a backlash against Muslim-Australians.
The campaign came a day after Prime Minister Kevin Rudd announced that federal elections would be held on September 7.
The cited that the full Islamic veil promotes the segregation of Australian Muslims. Party leader Daniel Nalliah said he was expecting a backlash against the policy.
Nalliah had a racial vilification charge against him overturned in 2006.
The party is confident of winning two Senate seats at the election.
Over four lakh people of the total Australian population are Muslims.
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