VICTORIAN Premier John Brumby has given himself an even chance of not having to deliver the bulk of his Government's $115 million drought package.

In launching the package this week, Mr Brumby said $58 million would go towards paying half of irrigators' water bills.

But the payments will not be made if irrigators gain 30 per cent of their water allocations by December 1, a scenario Goulburn Murray Water states has about a 40 to 50 per cent chance of happening.

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Last season, the Government set the allocation threshold at 40 per cent and paid up to the first $1000 on irrigators' fixed water charges and 50 per cent of the balance thereafter.

While the fixed water charge rebate will remain the same this season, the Government has decided to cut the allocation threshold to 30 per cent, without a clear explanation.

A government spokeswoman said: "the rebate was a season by season proposition, and reflected seasonal conditions".

GMW is due to make an outlook and allocation announcement today, which may raise irrigator allocations above the current levels of 13 per cent on the Murray and 9 per cent on the Goulburn. It will also give a more accurate indication of the chance of reaching a 30 per cent allocation on December 1.

Coalition country water spokesman Peter Walsh said the decision to cut the allocation threshold was a disingenuous and cynical act.

"At 30 per cent, irrigators are going to be struggling," Mr Walsh said.

"The threshold should have been set at 50 or 60 per cent. That's a balanced approach."

Victorian Farmers Federation water council chairman Richard Anderson said he failed to understand why the Government had undermined the value of the drought package.

"What's their reasoning? Are they (the Government) hoping we get to 30 per cent and they don't have to pay?" Mr Anderson said.

"A 30 per cent allocation following a very dry spring means farmers are really going to struggle."

One water corporation source said the decision left irrigators in limbo, facing enormous uncertainty on whether they would receive the water rate rebate or not.

However, VFF president Simon Ramsay welcomed other elements of the drought assistance package, praising the Government's decision to roll-over the 50 per cent municipal rate subsidy worth about $15 million to farmers.

Mr Ramsay said the package would help Victorian farmers and their communities dealing with another harsh season.

"It's not about pride any more, it's about survival," Mr Ramsay said.

"This isn't a handout by any means, this is about allowing us to produce food for both this country and internationally as well, so it's money well spent by the taxpayer to keep regional communities in regional areas."

Municipal Association of Victoria president Dick Goss said many farmers and rural councils had been anxiously awaiting an announcement on essential drought support programs for 2008-09.

"The MAV has been calling on the State (Government) to continue providing this program to drought-affected farmers and will seek assurances that the subsidy will apply for the full financial year, even though Exceptional Circumstances areas have only been declared until March 2009," Mr Goss said.

The Government has also allocated $6 million towards on-farm productivity improvement grants to assist farmers to undertake drought-proofing works and another $3.2 million for drought extension support.

Mr Brumby said the package would help farmers ride out the worst drought in modern history, but warned state and federal governments would come under increasing pressure to tighten the purse strings in the wake of the global economic crisis.

"In the short term this (drought) is about as tough as it gets, that's the reality and what we're providing . . . is significant assistance," he said.

• Other elements of the drought package include:
• $10 million for the continuation of the Catchment Management Authorities' drought employment program for farmers to undertake work to protect environmental assets on public and private land.
• $10 million from the Small Towns Development Fund to invest in much-needed infrastructure and boost local jobs in drought-affected rural communities.
• $2 million for the Drought Apprentice Retention Bonus, which provides $1500 grants to rural businesses for each apprentice they employ in drought-declared regions.
• $4.4 million for sport and recreation clubs to reduce their water use.
• $3.8 million for sports clubs to lay synthetic surfaces on their playing and training surfaces.
• $2.9 million for mental health services and community support to develop more sustainable responses for drought-affected communities by providing clinical leadership, support and better counselling.

This money would also pay for emergency relief assistance, in the form of food relief, Christmas hampers, toys, and assistance for back to school costs, distributed by Vicrelief and Foodbank, for those families in most need.