The state government is warning that stage 2 water restrictions could be introduced for towns on the Mitchell River supply in mid-January. That includes Bairnsdale and Lakes Entrance.

The government's Annual Water Outlook report shows that while supplies are good, ongoing strain is being caused by dry conditions and increasing population growth.

Minister for Water Lisa Neville said that recent rainfall meant water storages are slightly higher than this time last year, but it was important to remain vigilant about water efficiency to protect our supplies into the future

As well as Stage 2 water restrictions expected for the Mitchell River, the report said that under a dry climate scenario, Stage 1 or 2 water restrictions are likely for Brigalong and Buchan during summer.

Permanent Water Savings Rules are in place all year round and the government said all Gippslanders can play an important part in conserving water by being water wise at home and at work.

“As our climate continues to get drier and our population expands, we all have to do our part to help save water in our homes and businesses – boosting local supplies,” Ms Neville said.

“Water efficiency is just one of the measures we use to secure water for our future – we will also use the desalination plant when needed, increase our use of recycled and storm water, and modernise our irrigation system to stop leaks.”