Numerical modelling of the hydrogeology in the area south of Mount Gambier was used to examine the potential of increasing the Permissible Annual Volumes of extraction for the unconfined aquifer, beyond the levels of assessed vertical recharge to the aquifer. A three layered groundwater model was constructed and calibrated against existing long term groundwater level records and monitored coastal spring discharges. Six different extraction scenarios were modelled, using varying head conditions for the unconfined aquifer along the northern boundary of the model. Results from the modelling indicated that: · the drawdowns in the unconfined aquifer increased with higher extraction rates, with possible unacceptable impacts to existing groundwater users; · the discharges from the coastal springs decreased significantly with the higher extraction rates, with potential adverse impacts on the terrestrial and marine environments in these areas; · there was a reduced discharge from the unconfined aquifer to the sea for the higher extraction rates, with the potential risk of a raised salt-water interface in areas close to the coast, which could adversely affect both groundwater users and the established environment in these areas; · there was an increased groundwater inflow for the unconfined aquifer across the northern boundary of the model area for the higher extraction rates, which would exacerbate the longer term decline in water levels being observed in the general Mount Gambier area. It is recommended that the Permissible Annual Volumes of extraction for the unconfined aquifer be retained and not be increased, and that there be increased monitoring of groundwater levels and quality to assess the impacts of current levels of extraction. It is also recommended that investigations be undertaken to assess the environmental significance of the discharges from the coastal springs, to determine the position of the salt-water interface within the unconfined aquifer, and to determine the dependence of the coastal wetland environments on the groundwater level elevations in the unconfined aquifer.