Doubt over Hanson bank inquiry

The federal government says it will be up to the Senate to determine whether an inquiry is set up into the treatment of farmers by banks.

One Nation leader Pauline Hanson has told The Courier-Mail newspaper she won government support for an inquiry led by her party into concerns banks are engineering defaults to repossess farms.

However, a spokeswoman for the prime minister's office told AAP on Wednesday: "The government closely considers all proposals for Senate inquiries, but ultimately decisions on establishing particular inquiries are a matter for the Senate once formally proposed by a senator."

It is also understood Senator Hanson has not presented the government with any draft terms of reference.

She told Brisbane radio 4BC on Wednesday she had been "working with the government" on a Senate inquiry which would run for most of 2017, rather than a royal commission.

"The prime minister said if you have a royal commission it's going to take years and hundreds of millions of dollars - I don't want that for the public," she said.

"I said, 'let's go for a Senate inquiry and let's see the evidence'."

There are already Senate inquiries into financial advice, white collar crime, corporate tax avoidance, and consumer protection in the banking, insurance and financial sectors.

The Senate notice paper for the first sitting day of 2017 does not include a motion relating to the inquiry flagged by Senator Hanson.

Senator Hanson will need the backing of every government senator plus four members of other parties or the crossbench to have the inquiry established.

Labor financial services spokeswoman Katy Gallagher said only a royal commission into the banks would get to the bottom of issues that had led to ripoffs and scandals in the sector.

"Malcolm Turnbull is the best friend the big banks ever had and this deal (with One Nation) is further evidence of that," Senator Gallagher said.