Paynesville is situated on the Gippsland Lakes, facing Raymond Island across the narrow strait linking Lake Victoria and Lake King. It is about 16 km south of Bairnsdale, the provincial capital of East Gippsland.
Before the 1870s a few fishers frequented the area, sending smoke cured fish by steamer through the natural entrance of the Gippsland Lakes. In the late 1870s professional fishers moved to McMillan Strait, the settlement being known as Toonalook, supposedly an Aboriginal word meaning plenty of fish. Their catch was taken by steamer to Sale and railed to Melbourne.
In 1879 Captain Payne, Harbour Master and Inspector of Fisheries, visited the area to select a site for a wharf. The settlement was renamed Paynesville in his honour, although the name was not officially adopted until 1888. The wharf was soon constructed, followed by three hotels. Within a few years there were several stores, a post office, a hall, a school (1881) and a church. The township, as well as the fisher’s houses, was on higher ground, the foreshore being scrubby and swampy. When township lots were sold in the mid-1880s, a number of wealthy people built holiday houses. By 1896, the Victorian municipal directory described a settled township with three hotels, a mechanics' institute, school, church and post office. There were daily steamer services to Bairnsdale.
Fishing remained the town’s main occupation, supported by boat building and servicing industries. Lakes steamers were overhauled each year on the slipway at Paynesville. A number of boats were built there, the most well known being the steamers J.C.D. in 1888 and Gippsland in 1909.
In 1903 Paynesville was described in the Australian handbook:
By the turn of the century Paynesville had gained popularity as a holiday resort. The town centre moved closer to the wharf along the esplanade and facilities were developed along the foreshore. A new jetty was built in 1948 and anchorage provided for the large numbers of private craft belonging to amateur fishers and yachting enthusiasts. The slipway was disused after the demise of lakes shipping in the 1930s, but during World War II naval vessels were built and repaired at Paynesville and crash boats stationed there.
Paynesville grew rapidly from the 1950s. Many holiday homes were constructed but the town also attracted many retirees. There was further residential development in the 1980s with a subdivision of waterfront blocks (Toonalook Waters) connected by a canal system. A marina was constructed and shopping facilities developed. The ice works site on the Esplanade wharf was redeveloped with a restaurant and outdoor facilities. The problem of mosquitoes was largely overcome with regular spraying programs.
Paynesville maintained a fishing fleet, with 35 professional fishers in 1976. The Blessing of the Fleet has been an annual event since 1951. The town is now also an important boating centre, supporting boatbuilding and many associated industries. A number of clubs for watersports enthusiasts are based on Paynesville, including yachting, power boating, sailboarding and water skiing. Many competitive events are held at Paynesville, replacing the regattas of the early years.
A notable building at Paynesville is the church of St Peter by the Lake. Opened in 1961, the church has a nautical theme with a tower resembling a lighthouse and a pulpit shaped like the prow of a boat.
Paynesville has two recreation reserves, a primary school (191 pupils, 2014), a community centre and a community house, caravan parks and a ferry service across McMillan Strait to Raymond Island.
Census populations of Paynesville have been:
The median age of residents at the 2011 census was 57 years (Australia, 37 years).
South of Paynesville, across Newlands Backwater, there is the Newlands Arm residential estate. Its census populations have been:
The median age of its residents was 59 years at the 2011 census.
Frank Middlin (ed), Paynesville 1881-1981 Primary school No. 2343, Paynesville, 1981
Neil Hansen, Paynesville: a very special place, Bairnsdale, 1981
Anne Freeman, We will remember them, Paynesville, Bairnsdale, 1983