Moyne shire Mayor Wick Wolfe said this morning he had spoken to council chief executive officer Bill Millard, who was equally stunned drought funding had been allocated to Moyne.

"We have not applied for or lobbied about this funding," Cr Wolfe said.

"It's complete news to us and hard to follow up about on a Saturday.

"I'm sure we can find a shire to give it to.

"Bill is very skeptical about the funding. It has come completely out of the blue.

"I've spoken to other councillors and they are equally surprised."

Cr Wolfe said call would be made to the federal government first thing on Monday.

"I suppose for $1 million we should find out what it's all about," he said.

Cr Colin Ryan questioned how Moyne shire could accept the funding when there were others in dire need.

"How can we accept it when there are northern farmers suffering dreadfully and we are not?" he said.

It has been suggested that the funding may have been mistakenly not allocated for Moira Shire Council in northern Victoria, centred around Numurkah and Tocumwal.

Earlier: Moyne Shire councillors have been stunned to learn they have received a $1 million federal government grant for drought relief as the south-west experiences one of its best winter/spring seasons in years.

It's expected that councillors will discuss the grant at a workshop on Tuesday after the stunning federal government announcement on Friday.

Veteran councillor Jim Doukas simply struggled to comprehend why Moyne shire would be getting a $1 million drought relief grant.

"That's good, isn't it? $1 million is always handy," he said, explaining he had not heard about the announcement until contacted by The Standard.

"It's more than an embarrassment, it's bad management. We could always do with $1 million but to call it drought relief, it's hard to believe."

Cr Doukas said he would be interested to see the details of the grant.

"It's the first I've heard of it. We need to see the fine print," he said.

"We're having a good season, I suppose you could argue about grain prices and low milk prices, but we're generally we're going all right.

"I'm looking at grey skies, wet grass and plenty of feed. We should have been talked to before this grant was allocated, even confidentially.

"We have people from up north come down here for stock sales and to go fishing. They look around at how green it is and they are envious. They say we are laughing down here," he said.

Another council sources labelled the $1 million for drought relief "a disgrace and a joke".

"The assistance will be handy to get out tractors bogged in paddocks," the source said.

"There are thousands of farmers in NSW and Queensland on the edge of walking off their land and we're getting $1 million for drought relief.

"When they said Moyne shire, I thought it was a spelling mistake. We couldn't accept it when there are others in real and desperate need," the source said.

Member for Wannon, and federal education minister, Dan Tehan has been contacted for comment.

The federal government announced on Friday farmers and communities grappling with drought will get almost $100 million in extra assistance as the crippling dry spell continues to bite.

Prime Minister Scott Morrison jetted to regional Queensland on Friday shortly after returning to Australia from a trip to the United States.

The package includes $33 million to restart the mothballed Drought Community Support Initiative, which will give up to $3000 to eligible households.

A further 13 councils across Queensland, NSW, Victoria and South Australia will each receive $1 million for local projects - including Moyne shire.

There's also up to $51.5 million to overhaul the Farm Household Allowance - a payment with a similar rate to Newstart - for producers doing it tough.

The eligibility criteria will be extended and simplified, with the government estimating less than 7000 of the 24,000 eligible households are currently accessing it.

Mr Morrison said there were many reasons why farmers and people in rural communities had not reached out for help.

"My message to them is: you should. You work hard," he told reporters in drought-ravaged Dalby.

"This isn't welfare, this is helping people make sure that they can maintain a viability."

Labor leader Anthony Albanese was critical of the coalition's sluggish response.

"This is too little, too late from the prime minister," he told reporters in Sydney.

The opposition's agriculture spokesman Joel Fitzgibbon said the package was a band-aid response.

"Scott Morrison failed every test today. Our farmers and rural communities remain his forgotten people," he said.

National Farmers' Federation chief executive Tony Mahar welcomed the measures but said Australia had failed to find an effective approach to preparing, managing and recovering from drought.

"We need a comprehensive and enduring national approach to drought that focuses on preparedness and resilience measures," he said.

But Mr Morrison rejected suggestions there was no national drought policy, arguing his approach includes short-term relief and long-term planning.

Drought Minister David Littleproud warned the drought breaking will not result in a quick fix.

"The only panacea to this is rain. It's not just one rain event, it's going to take a couple of years for people to get back on their feet," he told Sky News.

He said it was time for other states to "lift a finger" on building dams to drought-proof Australia, after praising NSW for putting its hand up for projects.

"We perpetrate our own misery in this country by saying why can't we do things instead of how can we," the minister said.

Mr Albanese defended Labor's dam-building record last time it was in power.

"This government has talked about dams on literally thousands of occasions and it hasn't dug a hole yet," he said.

Have you signed up to The Standard's daily newsletter and breaking news emails? You can register below and make sure you are up to date with everything that's happening in the south-west.