Pauline Hanson is demanding the money from corporate tax cuts due to the big banks be set aside for victims of their misconduct.

The One Nation leader wants the banks to lose the tax relief following their “inexcusable” behaviour exposed at the financial services royal commission.

“Put it into a fund and that money should be there to pay all these claims by people that the banks have cheated,” she told The Australian on Monday.

Senator Hanson also believes the fund should be used to ensure the stability of the financial system – “so if the banks crash, it’s not the taxpayers who are picking up the costs again”.

Prime Minister Malcolm Turnbull wouldn’t be drawn on her call.

“Where banks have done the wrong thing they must pay compensation,” Mr Turnbull told reporters in Germany.

Financial Services Minister Kelly O’Dwyer on Sunday argued the banks should not be quarantined from getting the government’s planned business tax cut, insisting it’s not a “morality tax”.

But like fellow crossbencher Senator Hanson, Senator Derryn Hinch says the banks should not be rewarded for their bad behaviour.

Senator Hinch, whose support the government needs to pass the reduction in the corporate tax rate, is sticking to his guns.

He says he will support tax cuts for companies with a turnover of up to $500 million – like the Senate did for firms with a turnover of up to $50 million last year.

“But will not reward corrupt banks being exposed daily in the royal commission. That is a pledge,” he said in a tweet on Sunday.

The government delayed putting its legislation to a vote in the upper house just before Easter, admitting it didn’t have the numbers.

-AAP