I believe this has been discussed frequently with the same emotive arguments put forward by labor supporters as you have just stated.
And it's also been explained before that it's not the levy itself, it's labor's apparent terrible track record of managing anything.
IMO, there is a distinct possibility that any funds raised from the levy may not actually reach those for whom it is supposedly intended.
It has also been said that good governments normally have funds set aside for such disasters. It seems this current labor government only have funds for the projects they want but they don't seem to care enough about Qld or the Australian people to find these funds within their annual budget which I understand is around $350B per annum. $1.8B is about half a percent.
IMO, it is possible that Ms Gillard is seeking some sort of personal achievement with both the levy and now carbon tax. Maybe it is the fabian way to achieve the imposition of unpopular taxes - nothing else seems to make much sense of the imposition of these taxes to the Aussie taxpayer.
And I sometimes wonder if those supporting these new taxes won't actually be hurt by them.
