Local tradespeople from fire-devastated communities will be prioritised to get money from the $2 billion recovery fund to lead the rebuild of Australian towns.

Authorities are also working out the best way to stimulate businesses in tourism centres and farming communities where businesses and roads have been destroyed.

A property destroyed by bushfires at Cobargo on the NSW south coast. Credit:James Brickwood

Treasurer Josh Frydenberg told insurance bosses at a meeting in Canberra on Tuesday to prioritise local tradespeople when they started paying out for rebuilds.

"The insurance companies have already lined up builders to start the rebuild process, and what is very pleasing and I underlined this point to the insurance companies today, [is] to prioritise the use of local tradespeople," he told reporters.