Natural resource management organisations in Australia routinely establish resource condition targets in their regional plans and catchment strategies. We reviewed biodiversity, water and community resource condition targets set by Catchment Management Authorities (CMAs) in Victoria and New South Wales (NSW) over planning cycles since 1997 against criteria of being specific, measurable and time-bound (SMT). The overall quality of targets is poor, with less than 30 per cent of targets meeting the three criteria. Disturbingly, there are no SMT targets in the most recent NSW CMA catchment strategies. We identify three major reasons for poor target setting: a lack of appropriate standards and guidelines from governments to enable high quality target setting; a lack of realism about the budgetary and technical feasibility of ambitious environmental targets amongst those involved in natural resource management; and a lack of adequate focus on outcomes by both CMAs and governments. Improvements to target setting can be achieved through stronger signals and commitment by governments, including by rewarding performance of regional bodies practising outcome-focused accountability. © 2013 Environment Institute of Australia and New Zealand Inc.