Senator Sam Dastyari, who was born in Iran, was harassed on Wednesday night with taunts calling him a "terrorist" and "little monkey", reports the BBC.
Senator Dastyari on Thursday said politics in Australia was heading to a "very, very ugly place" and attacks like the one he was subjected to "makes me feel small, makes me feel disgusting, it makes you feel kind of bad and that's what they are created to do".
Dastyari later described the verbal assault as "the sickening face of white nationalists".
"I worry more about the 15-year-old girl getting the school bus home today having to get this kind of abuse than a politician that's lucky enough to have the some support structures around him".
"I call him "Mr Bean" because that's exactly what he looks like, a little Mr Bean".
Dastyari says he is consulting with his family before deciding whether to lodge a formal complaint against his abusers.
Prime Minister Malcolm Turnbull said racial vilification had "no place" in Australia.
"Mr Erikson does not even believe his own definition of racism, later saying: "(Senator Dastyari) called me a redneck which is actually a racist slur against white people".
He was backed up my Labor MP Tim Watts who said into their camera "What race is dickhead?"
Labor Leader Bill Shorten said he was disgusted by the "ugly" incident.
"But, you know, what is this country coming to when you can't go out and have a meal without being abused by idiots and by racist idiots?" he asked. "It should have zero tolerance for racist abuse like this", Mr Turnbull told Channel Seven.
"I think he's a waste of space and I think he should be a comedian".
One of the Islamophobe's was apparently wearing a uniform for Toll, an Australian logistics company.
A Toll spokesperson told AAP the actions in the video "in no way reflect our beliefs and values as a company".
Erikson told Melbourne radio 3AW he wasn't employed by Toll and wore the shirt to his "other job".
In 2014 Mr Eriksen avoided jail time after pleading guilty to stalking a Melbourne Rabbi after making a number of racially-motivated phone calls.
Mr Erikson said the racist taints constituted freedom of speech.
He was sentenced to a 12-month community correction order, involving 150 hours of unpaid work. "If he wants to go for Toll and try and hurt me financially he can go for it".
In 2015, he took part in a mock beheading outside Bendigo Council to protest against a planned mosque in the western Victorian city.