The determination of a sustainable level of extraction is a challenge to water reform and planning, especially where information on environmental assets is sparse, and where future flow regime is threatened by irrigation and climate change. Hamstead (2009) considered a catchment to be over-allocated and/or overused if projected changes in freshwater flow posed a medium or higher level of risk to key ecological assets. The present paper investigates Hamstead's (2009) two-step risk analysis process by using the Coal Pitt Water Catchment in Tasmania, Australia, where the Ramsar-listed Pittwater'Orielton Lagoon was identified as the key ecological asset. Although Hamstead's (2009) approach revealed over-allocation and/or overuse, several limitations emerged. In particular, setting the current condition as the baseline ecosystem condition, rather than that at the time of Ramsar listing, permits over-allocation and/or overuse to continue and contravenes international, national and state obligations. Projections could be improved by inclusion of a river condition index and hydrological indicators such as proportion of total natural flow retained, frequency of estuary flushing, and percentage of median annual flow impounded. Available ecological information and projected hydrological change should be included in determining the threat to environmental assets because statutory obligations require strategies to manage processes that threaten species and communities.