Natural disasters remind Australians of their tenuous hold on such a vast and forbidding land, he told parliament on Tuesday.

"Fire holds a great terror for us all - its power, its speed, its roar, its relentless destruction, its capricious shifts in course, its wont of mercy," Mr Rudd said.

The prime minister gave parliament an update of the number of people killed, which currently stands at 173, and homes destroyed.

"And the numbers just mount and mount," he said.

"Our first response as Australians must be ... to extend the open hand of friendship, of empathy, and of giving."

Mr Rudd said bushfire victims were not alone.

"The people of Victoria are not alone in this disaster because the entire nation is with them," he said.

"And not just the nation, but good people across the world - an expression of our common humanity."

Mr Rudd said disaster relief payments of $1,000 per adult and $400 per child for those affected by the fires started flowing on Monday.

"At close of business 9 February we had received 2,027 claims with 427 paid and 1,600 pending," the prime minister said.

Cash payments were made at Yea, Warragul and Alexandra on Monday.

Mr Rudd said banks were working to ensure all those affected were able to access cash as soon as possible.

"Indeed, a number of banks have agreed to establish facilities at local recovery centres to make cash payments there and then," Mr Rudd said.

Close to 500 adults and children had been provided with assistance worth $493,400.

"Authorities are working to provide further assistance as quickly as is humanly possible."

The national disaster relief program applies in 25 local government areas, he said.

Mr Rudd thanked all those who had donated to the Victorian bushfires appeal fund, and said it held more than $15 million.

"I urge all Australians to make a contribution to this appeal," he said.

"And I thank from the bottom of my heart all of those Australians who have dug deep, it's a great testament to what Australians do at times like this."