A north Queensland Aboriginal council says it won't be able to cope if the town's critical water shortage becomes a crisis.
Palm Island's water department believes the community of 2000 people has 180 days until its dams dry up.
Mayor Alf Lacey will meet with the local disaster management group next week to decide whether it is time to contact the state government about emergency plans.
He said the council would not be able to implement emergency measures on its own if the situation worsened.
"Shipping in water or taking a lot of people out, the cost ... would outweigh the council's budget," he said.
Restrictions are now in place on the island and a program has been rolled out to fix leaky taps.
Mr Lacey says only essential visitors should stay in the community while water is low, but there is no reason yet for residents to leave.
Meteorologists expect rainfall to remain below average over coming months due to a large El Nino weather system in the Pacific Ocean.
The Red Cross shipped water to Palm Island a decade ago, amid council fears it had a month's supply left.
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