Labor backbencher Ed Husic has questioned the government's decision to spend more than $20 million on a Disney film, saying the money could be better spent on more urgent needs such as funding hospitals.

Prime Minister Julia Gillard announced on Tuesday that the government would pay Disney film producers $21.6 million to ensure the movie 20,000 Leagues Under the Sea would be filmed in Australia.

Labor member Ed Husic has questioned funding to bring the production of a Disney film to Australia Credit:Alex Ellinghausen

To justify the decision Ms Gillard said the investment could ''create up to 2000 jobs''.

She cited the recent filming of The Wolverine, starring Hugh Jackman, which ''generated $80 million of investment and has reaffirmed Australia's status as one of the world's best filming destinations''.