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Old 06-03-2011, 09:47 AM
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Default Federal government sets up special body to oversee flood recovery spending

Prime Minister Julia Gillard has moved to counter fears of wasting taxpayer's money by setting up a special body to oversee flood recovery spending.

Ms Gillard on Monday appointed former NSW premier and Howard government minister John Fahey to head a "reconstruction inspectorate".

The Prime Minister said the body would require audited statements for all federal government spending on the rebuilding effort.

"It's my determination to get value for money," Ms Gillard told reporters in Canberra.

The watchdog will be able to inspect contracts and projects, ensure they meet milestones and investigate complaints and issues raised by the public.

Key cross benchers, whom the government is trying to woo to pass flood levy legislation through parliament, have queried whether the funds will be properly spent.

Ms Gillard said lessons had been learned from the insulation scheme and the Building the Education Revolution program, which she oversaw as education minister.

One of the key people on the new inspectorate will be Brad Orgill, who headed the inquiry into the BER amid claims of waste and mismanagement of funds.

The Regional Australia department head Glenys Beauchamp will be the other commonwealth representative.

Martin Albrecht, former managing director of Thiess, and Matt Sheerin from Deloitte will assist Mr Fahey on the inspectorate.

Ms Gillard promised she would take personal responsibility for "every" decision made under the rebuilding program.

The Prime Minister also flagged more exemptions to the levy, as fires raged on Perth's outskirts and Victorians were affected by flooding.

"If people have been hard hit by natural disaster then (they) shouldn't pay the levy," she said.

Shadow cabinet is meeting in Canberra on Monday to discuss its alternative plan to funding the recovery.

The meeting comes amid speculation the government may trim welfare spending and rethink a health deal with the states to find savings.

Opposition treasury spokesman Joe Hockey said the coalition would deliver reasonable spending cuts.

"We are not going to take a baseball bat to families in the way that the Gillard government wants to do," he told ABC Radio.
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