Independent senator Nick Xenophon has added his voice to the debate, criticising the levy as a "band-aid solution" and urging for a broader discussion on disaster response.

It sets a dour tone for the federal government as it begins talks with Senator Xenophon and others on the crossbenches about seeing the levy legislation through parliament.

Ms Gillard today said she remained open to the idea of discussing other long-term solutions with the independents, but was otherwise unwilling to compromise.

Asked if she is going to rethink the levy in the wake of its contentious reception, she told ABC Radio: "No, I'm not.

"I'm determined to rebuild, as we need to, around the country.

"The best package is for us to cut back on the federal budget, and we have."

For every dollar the government was asking taxpayers to pay in levy, spending was being cut back two dollars, Ms Gillard said.

"This is a fair proposition."

With cabinet meeting later on Monday, the prime minister also rejected Opposition Leader Tony Abbott's predictions the levy could eventually cost her her job.

"This is him looking for political advantage," she said.

"He made a speech over the weekend about how he thinks this can be something that assists him and the Liberal Party back into government.

"I don't think Australians want to see that kind of approach."

Senator Xenophon, like independent MPs Tony Windsor and Rob Oakeshott, has appealed to the government to take a long-term approach to disaster management.

"Even if you accept the need for a levy, it will still be a band-aid solution, it will cover this crisis, but not other crises," he told ABC Radio.

"That's why it's important that we have a broader approach, a national approach."

Senator Xenophon said there was scope for the government to provide broad cover for natural disasters such as floods, given the potential for private insurers to withdraw.

Governments similarly moved to fill the breach following incidents such as the September 11 terrorist attacks in the US and Cyclone Tracy, which hit Darwin in 1974.

Mr Windsor and Mr Oakeshott have urged the government to consider a natural disaster fund.

Treasurer Wayne Swan said there was room for discussions, but that it shouldn't impede the introduction of the levy.

"It's an extraordinary circumstance which requires a response in the short term, the middle term, and we're happy to have a conversation about the longer term," he said.

Meanwhile, the government hit back following claim by Nationals leader Warren Truss that coalition seats were targeted in the government's big infrastructure cull.

Some $1 billion worth of projects have been deferred to help foot the floods damage bill.

"We had to select projects which were in the planning stage and not under fixed contracts, so when you're looking across your infrastructure expenditure there's only so many projects that fit that bill," Ms Gillard said.

Transport Minister Anthony Albanese attacked Mr Truss's comments as being irrational and disgraceful.