NSW Liberal MP Catherine Cusack to resign over 'unethical' flood funding distribution

Liberal MLC Catherine Cusack will resign from New South Wales Parliament over the distribution of emergency disaster funding on the state's North Coast.

There was outrage last week when Ballina, Byron and Tweed shires missed out on the government's additional payments as nearby Lismore, Richmond Valley and Clarence Valley received an extra two weekly payments of $1000 per adult and $400 per child.

A spokesman for Ms Cusack on Wednesday night confirmed to 9News.com.au she had announced her intention to resign.

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An official resignation isn't expected until after the preselection process to replace her has taken place.

The Lennox Head resident, who has previously slammed her government over koala policy and Health Minister Brad Hazzard over a Byron Bay lockdown, told the ABC the flood funding was her catalyst for leaving Parliament.

"The idea that being a flood victim in a National Party-held seat makes you more worthy than a flood victim who is in the Richmond electorate ... is probably the most unethical approach I have ever seen," she said.

The three areas receiving extra funding are all in the Nationals-held federal seat of Page, while Ballina, Byron and Tweed are in Richmond, held by Labor's Justine Elliot.

Ms Elliot on Wednesday night called on other North Coast Liberal and National MPs to follow Ms Cusack's lead and resign.

"They have all failed us," she said, on Facebook.

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"Locals will not forgive and will not forget that in the midst of this ongoing crisis, Scott Morrison and his candidate Kimberly Hone, along with all local Liberals and Nationals, have deliberately excluded our area from extra disaster payments."

Federal Treasurer Josh Frydenberg defended last week defended the government, saying expert advice guided the extra funding.

"We know that in the area of Lismore it's been a catastrophic event, and the damage that we've seen there is greater than what we've seen in other parts of the country due to floods," he told Today.

"So what we did is we sat down with the experts. They gave us the facts on the ground."