Labor has called on the government to rule out the creation of a government fund to bail out struggling companies or provide loans to businesses.
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The Senate on Thursday agreed to a joint parliamentary inquiry to consider whether such a fund should be established.
An inquiry into the idea of an "Australia fund" was one of the conditions Palmer United Party leader Clive Palmer placed on his party's support for the government's mining tax repeal bill.
Labor used question time to challenge the government over what it has dubbed the "Palmer piggy bank".
In a statement on Thursday, Mr Palmer said an "Australia fund" would, among other things, loan money to businesses, act as a guarantor for loans, assume control of relevant property of a business for a specified time, purchase existing bank loans and provide emergency funding after a natural disaster.
The government has shown reluctance to bail out businesses, turning down requests for assistance from Toyota, SPC Ardmona, Holden and Ford.
Due to his business interests, Mr Palmer has been accused of having a conflict of interest in calling for such a fund.
In the House of Representatives on Thursday, Opposition Leader Bill Shorten demanded the government rule out supporting the Fairfax MP's proposal.
"Will the Treasurer right here, right now rule out creating a government-owned 'Australia fund' or a Palmer piggy bank as a result of the government's dirty deal with the leader of the Palmer United Party?" Mr Shorten asked.
Treasurer Joe Hockey said the government was prepared to negotiate with crossbenchers to pass legislation in the Senate.
But that should not be taken as a signal that they would back the proposal.
"In relation to the proposal on an 'Australia fund', which I understand is a private members' bill put forward by the Member for Fairfax, let me say this, the Australian government's position in relation to these matters is very clear," Mr Hockey said.
"We believe that industries, being in the business of relying on its own enterprise, should not become reliant on taxpayers' support.
"Ultimately industry assistance is revenue from another person."
