MICHELLE Landry says over $1 billion has been parked for safe keeping due to "highly questionable" natural disaster claims by some Queensland councils and the State Government.
The Member for Capricornia said both the federal and state Auditor Generals found at least $115 million worth of claims that were lodged were unlawful and should never have been submitted to the Commonwealth for reimbursement.
The comments come after the State Government called on the Federal Government to re-pay Central Queenslanders the money it owes from Tropical Cyclone Marcia.
Ms Landry said one example of potential fraud relates to some bush fire trucks.
"One council claimed they lost four fire trucks in a bushfire and made a natural disaster funding claim for them.
"The truth was that only two fire trucks were damaged. The other two never existed in the first place," she said.
"This is a clear example of why each claim must now be thoroughly checked off by both the Queensland and Commonwealth Auditor Generals."
Ms Landry said the situation was an example of tax payer's' money potentially being ripped off under disaster funding by people in state and local government.
"It borders on dishonesty and potential fraud," she said.
"Taxpayers should quite rightly expect that questionable claims be properly investigated before being paid out.
"The Natural Disaster Recovery (NDRRA) money is still budgeted for; we have placed the funds over the next two financial years to ensure the funds are still available to Queensland - but we need to ensure the claims are eligible before they can be reimbursed."
Ms Landry also said the Queensland State Government had been "slack" in getting its paperwork together to submit to Canberra for natural disaster reimbursement.
"They still haven't submitted all of the correct paperwork. Since we are talking about figures in the billions of dollars, it is not unreasonable to expect the state to explain their claims," she said.
"The fact is that if the Auditors can get the information that is required to get their audits completed, all financials can be paid out sooner."
Keppel MP attacks Michelle Landry
Member for Keppel Brittany Lauga says the Turnbull Government has not paid the post-cyclone recovery bill.
The MP called on the Coalition to stop making "false promises" about disaster-recovery projects and re-pay Central Queenslanders the money it owed from Tropical Cyclone Marcia.
"The Turnbull government and its local LNP member Michelle Landry like to take all the credit for the post-cyclone recovery, but they still have not paid their bill," she said.
"The Member for Capricornia has been in photo after photo showing off the disaster-recovery works funded under the NDRRA arrangement, but the money promised for critical work on the Scenic Highway and Pilbeam Dr is being withheld.
"The Turnbull government has shown it is no friend of Central Queensland by withholding more than $1 billion in Natural Disaster Relief and Recovery Arrangement (NDRRA) payments to the State Government.
"The State Government spent this money in good faith expecting that the Federal Government would follow through on its responsibilities and obligations under the NDRRA. Why won't the Turnbull Government pay up?"
Ms Lauga said the current disaster-recovery claim was submitted ahead of schedule, with the expectiation the outstanding $1 billion in 2015-16 would be paid, as was indicated in the Federal Mid-Year Economic Financial Outlook published in December.
"The politicisation of disaster-recovery funding is unprecedented and disgraceful," Ms Lauga said.