Melbourne, Jan 17 (Agencies): Premier of Australian State of Victoria Ted Baillieu has set up a Cabinet Task Force to provide immediate support to flood-affected residents in the province, where rivers are swollen following heavy rains.

Over 500 properties in the town of about 14,000 people in Victoria's wheat belt, 200 km west of Melbourne, could be affected in some of the worst flooding there in a century, according to latest report.

The Premier also asked the Federal Government to declare the flood a severe event which will allow flood victims access to funding support.

Baillieu also announced five million dollars clean- up fund for local councils to aid in waste disposal and 15,000 dollars restoration grants for farms and businesses.

Low-interest loans of up to 200,000 dollars will also be available to farmers and small businesses as part of the recovery effort.

There will also be four million dollars for community groups for asset repairs, while 30 million dollars have been set aside to replace vital infrastructure such as roads and bridges.

Hundreds of Victorian residents are either sandbagging their own homes or helping neighbours as fears mount that the bulging Wimmera river will devastate the western Victorian town.

About 500 homes stand in harm's way, and the town could be split in two if the floodwaters top the Western Highway Bridge.

"The Wimmera River is higher than the levels seen in September 2010 and it's still rising," State Emergency Services spokeswoman Natasha Duckett said.

"The township could be bisected with a waterway right through the middle of town and the (Western) Highway cut," she said.

Meanwhile, police are conducting a desperate search for a seven-year-old who fell into the Goulburn River on Monday.

The boy fell into the water at Kialla, four kilometers south of Shepparton. Local police are searching from the river banks and have called in water police, the search-and-rescue squad, air wing and State Emergency Service.