Scott Morrison has defended the Coalition's preference deal with Clive Palmer, saying the Liberal Party and Mr Palmer shared the same disdain for Labor's plans to increase taxes.

Speaking in the Townsville-based marginal seat of Herbert, where Mr Palmer left workers and taxpayers millions of dollars out of pocket when he closed his nickel refinery, the Prime Minister said while there were no policy deals between the two parties, they were a natural fit in terms of opposing Labor's agenda.