On Friday, Prime Minister Scott Morrison returned from the USA to announce a $100 million package to assist drought affected farmers. The assistance also included $1million for 13 local government areas to spend on infrastructure, mental health support or other projects.

The Morrison Government is now being forced to review all 123 councils eligible for assistance funding after it admitted to The Sydney Morning Herald and The Age that the Department of Infrastructure had used the wrong weather data in awarding the grant and that would trigger a review of the entire process.

In the wake of the government admitting it had used the the wrong data, Mrs Phillips has said the decision on which councils will be eligible appears to be focused more on the government's election commitments than on helping farmers suffering from the drought.

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"Our dairy industry is in crisis and the Liberal-National Government has once again wasted an opportunity to provide real support to South Coast farmers," Mrs Phillips said in a statement.

"This is the same Prime Minister that came to the South Coast and wouldn't even meet with local farmers,"

"Our dairy farmers are being paid less than the cost of producing their milk, but the Prime Minister continually ignores their pleas for help."

Opposition spokesman for agriculture and Hunter MP Joel Fitzgibbon lashed out at the federal government, saying severely drought-affected communities in NSW had been forgotten.

The towns of Singleton and Muswellbrook in Mr Fitzgibbon's electorate missed out on the $1 million grants, although both are on the NSW Department of Primary Industries' drought map.

"The decision to leave these drought-affected communities off the list is yet another example of the inadequacy and ad hoc nature of the Morrison Government's drought response," he said.