Powerful inquiry into banks in the balance as Nationals MPs ponder crossing the floor

Queensland MP Llew O'Brien told Fairfax Media that he was a "50-50" chance to vote for a commission of inquiry, which has the same powers as a royal commission but reports to the Parliament, not the executive.

If he voted in favour of it, and was joined by one more Coalition MP – for example, fellow Queensland MPs George Christensen or Warren Entsch, who have previously called for a royal commission – an inquiry would likely be established through the support of Labor, the Greens and the crossbench.

Mr O'Brien told Fairfax Media "I'm grappling with it at the moment, it's something I'm considering".

"What I'm weighing up is whether we need to find out what happened in the past, when we may have a solution in the future. I'm 50-50 at the moment."

His Queensland Nationals colleague senator Barry O'Sullivan revealed on Friday he would introduce a bill to establish a commission of inquiry after the Senate deals with same-sex marriage legislation, probably on November 30.

The move underscores tensions between Coalition government partners, the Liberals and Nationals, on this issue and others, such as same-sex marriage.

Former Nationals leader Barnaby Joyce, who is campaigning to win back his northern NSW seat of New England, distanced himself from the growing push within the Nationals.

"If someone wants to tell me what a royal commission can do that we can't already do, I'm more than willing to support it. But no one has come up with anything," he told Fairfax Media.

Prime Minister Malcolm Turnbull said the government had already implemented "all of the recommendations that a royal commission would be likely to make are being undertaken now ... so that is why we have not established a royal commission".

But Senator O'Sullivan told Fairfax Media he was currently drafting a new bill and would seek the support of the entire Nationals party room for it.

"There is more support for this than people realise," he said.

"The time has come to shine a light on this. I hear the PM talking about measures they will take, but very few will have any retrospective impact on people affected by this. The banks aren't frightened of the compliance or penalty regime."

"I think this has the ability to drive massive cultural change in the banks.

Nationals-aligned MPs Ken O'Dowd and Luke Hartsuyker have previously indicated they could be open to a royal commission too. Mr O'Dowd indicated on Friday he would probably not support it but "it will depend on what's in the bill". Mr Christensen and Mr Hartsuyker were not available for comment.

The commission of inquiry would scrutinise Australia's banking and financial sector and, in particular, examine historic cases of bad behaviour by the banks that have cost Australians their homes and businesses.

Senator O'Sullivan's bill is expected to easily pass the Senate - as a similar one did earlier this year - with the support of Labor, the Greens, Nationals and crossbench MPs.

But while that bill fell just short of a majority in the House in June, this time, the result could be different.

An absolute majority of 76 MPs would be required to suspend standing orders to bring on debate in the lower house about Senator O'Sullivan's private members bill.

Labor and the lower house crossbench could provide 74 votes, and if Mr O'Brien was joined by Mr Christensen or Mr Entsch to provide the final two votes, debate could begin and the inquiry could then be established.

Mr Entsch, who is currently in New York but will return for the final two sitting weeks, said in the first instance, he wanted to meet Treasurer Scott Morrison and discuss what progress has been made in cases referred to the Treasurer.

"I am not making threats to cross the floor and I won't be part of a stunt," he said.

"But my position hasn't changed - the banks will be held accountable for the sins of their past."

The push for a royal commission follows a string of financial scandals in recent years, including the CBA financial planning scandal and the CommInsure life insurance scandal, many of which were revealed by Fairfax Media.

It is Labor policy to hold a royal commission into the banking sector if it wins government.