Queensland billionaire Clive Palmer has announced he is setting up a new political party and will run as a candidate at the next federal election.

He told Lateline Australia needs a new party "to unite all Australians in a time of crisis to work together".

"I think we need to take away the game from professional politicians who say the same thing," he said.

"It doesn't matter whether it's Tony Abbott or Julia Gillard, they've got the same lobbyists influencing them, the same focus groups. We need to think about more what the people need."

He says the party, named the United Australia Party, has been formed with a constitution and has applied for registration in Queensland.

It shares its name with the United Australia Party which governed Australia in the 1930s and early 40s under prime ministers Joseph Lyons and Robert Menzies.

"It's a reformation of the original party which has had three prime ministers in our history, and is a shining example of where we should go," Mr Palmer said.

"I definitely will be running in a seat in Queensland but it would be presumptuous of me (to say what seat) - like any political party it's got to have it's own preselections.

"By the end of next week we'll be announcing some of our candidates for Federal Parliament. We plan to run in 127 seats in the House of Representatives and all Senate seats."

'We've got some great ideas'

Mr Palmer says some of his policies include banning lobbyists from the party, scrapping the carbon tax retrospectively and arranging for asylum seekers to fly to Australia to seek protection.

"We think we've got some great ideas, we think we can contribute to the debate and hopefully we can get the support of Australians," he said.

"It's not reasonable to say Australians will vote for a party or their votes are locked in before the contest. Let's have the contest, let's have the best ideas out there, let's let the people decide."

Mr Palmer last year walked away from his lifetime membership of the Liberal-National Party (LNP).

He appeared set to form his own party late last year, before announcing he had decided against it.

"I was a reluctant warrior, but we've had overwhelming responses from people in so many states saying something has to be done to ensure that government is restored back to the electorate, rather than being run by lobbyists," he said.

Previously Mr Palmer has indicated he would like to run for Wayne Swan's Brisbane seat of Lilley.

When asked about Mr Palmer's plans, the Federal Treasurer suggested it was hypocritical for the mining magnate to criticise vested interests in politics.

"Mr Palmer has been a card-carrying member and life member of the LNP," he said.

"I'd never be surprised [at] what he'd say about the Labor Party but I'm extremely surprised what a life member, a card-carrying member for over 30 years, is now saying about the LNP and he's saying the LNP is controlled by vested interests."

Former prime minister Kevin Rudd told Channel Seven Mr Palmer's timing means people will not have enough time to properly scrutinise his new party.

"If you're going to run and you're going to put a lot of money behind your campaign, then at least the Australian people have a right to put you under some scrutiny about policies you would take to an election, and whether they should be supported or not," he said.

"I think this last minute stuff like Clive's got in mind is not good."

Editor's note: (May 10) The article originally listed William Hughes as a UAP Prime Minister.