"I want to be the sensible centre and I want to be a moderating force," she told reporters.
Dr Phelps said she would not block supply but the Morrison government would have to "behave in a particular way" to get any other guarantees from her.
"I will support good legislation, I'll try to modify legislation that needs to be modified, I will block bad legislation," she said.
Dr Phelps was accompanied by Centre Alliance MP Rebekha Sharkie, who this year defeated the Liberals' Georgina Downer in South Australia's Mayo by-election.
Ms Sharkie didn't think it would be unsettling to have another crossbencher, telling reporters she imagined it could be a very constructive parliament and "not something to be feared".
"We will work well with the government just like the crossbench has for the last two years," she said.
Their comments come after Mr Morrison on Saturday warned a Liberal loss could mean a hung parliament and "unnecessary uncertainty in our economy and the stability of our government".
He said the Sydney seat was a three-horse race between his own party, Labor and Dr Phelps.
While singing the praises of Liberal candidate Dave Sharma, the prime minister urged those who were considering voting for Dr Phelps to "think about that carefully".
"(Dr Phelps) is clearly running strongly second and if she continues in that place, she can still be a long way behind on primaries and then she can come over the top and win that by-election," he told reporters in South Australia.