Federal Cabinet Minister Christopher Pyne has used the turmoil surrounding Clive Palmer's Queensland Nickel to warn voters away from minor parties.

Key points: Cabinet Minister Christopher Pyne warns voters against 'unstable' minor parties

Cabinet Minister Christopher Pyne warns voters against 'unstable' minor parties Mr Pyne calls Clive Palmer's party a disaster, believes he will lose seat

Mr Pyne calls Clive Palmer's party a disaster, believes he will lose seat Recently formed parties include Nick Xenophon Team, Glenn Lazarus Team, Jacqui Lambie Network Independent and John Madigan's Manufacturing and Farming Party

The refinery was placed in voluntary administration on Monday, having donated more than $20 million to the Palmer United Party (PUP) over the past two years.

Mr Pyne said voters in Mr Palmer's seat of Fairfax would be likely looking for a new local member.

He told Channel Nine that PUP had been a "disaster".

"This is an example of why people shouldn't play with independents and minor parties, because of the instability they create," he said.

"Quite frankly, whether it's Labor or Liberal, we have the processes in place to ensure that we don't have the kind of outcomes that happen with PUP or One Nation or whatever political party is passing at the time."

Mr Pyne is facing a challenge from a minor party candidate in his own Adelaide seat, where independent senator Nick Xenophon is fielding a candidate for his newly formed party.

Senator Xenophon dismissed Mr Pyne's comments, saying they were very telling in his support for a duopoly.

He told the ABC that he is "nothing like" Mr Palmer.

"He's not doing very well, for a whole range of reasons — but I am nothing like Clive Palmer," he said.

"The processes for the Nick Xenophon Team are completely different from the Clive Palmer processes.

"Clive went into Parliament running a number of substantial businesses with significant business interests. That is also a real point of difference."

Senator Xenophon's party, the Nick Xenophon Team, is one of several parties formed by sitting politicians such as:

Queensland senator Glenn Lazarus, who split from PUP to later create the Glenn Lazarus Team

Queensland senator Glenn Lazarus, who split from PUP to later create the Glenn Lazarus Team Tasmanian senator Jacqui Lambie, who also split from PUP and has formed the Jacqui Lambie Network

Tasmanian senator Jacqui Lambie, who also split from PUP and has formed the Jacqui Lambie Network Independent senator John Madigan, who has registered John Madigan's Manufacturing and Farming Party

There are currently 49 political parties registered with the Australian Electoral Commission, with more in the application process.

The count is lower than the total registered for the 2013 federal election, which saw the highest number of minor parties in Australian history.