Australia’s Acting Prime Minister and Treasurer Wayne Swan and Queensland Premier Anna Bligh have announced the signing of the National Partnership for Natural Disaster Reconstruction and Recovery.

The agreement responds to the devastating floods across much of Queensland in December 2010 and January 2011, and the terrible impacts of Cyclone Yasi.

"This signed agreement means we can get $2 billion in Commonwealth money out the door and into Queensland communities where it is needed right now," said Acting Prime Minister Wayne Swan.

Key elements of the agreement are strong reporting and auditing requirements to ensure that taxpayer money is spent appropriately.

It provides for the Reconstruction Inspectorate, led by Mr John Fahey AC, which will oversee reconstruction activity to provide assurance that value for money is being achieved in the disaster response.

"This agreement paves the way for the advance payment of the $400 million to local councils as was previously announced," said Premier Anna Bligh.

"This National Partnership also includes an additional upfront payment of $50 million from the Commonwealth to facilitate the recovery process in North Queensland following Cyclone Yasi," she said.