Mayor Murray Emerson said the rate rise would raise the money council needs to provide services.

"If we don't raise our rate amount, we don't raise $15.8 million and the way I see it, we probably go down the tube," he said.

Cr Tony Driscoll called on state and federal governments to fund local government adequately.

He said out of every taxation dollar, three cents went to local government, 16 cents to the state government and 81 cents to the federal government.

Cr Kevin Erwin said council hated putting up rates by five per cent.

"We know people are struggling. The only alternative is to close services," he said.

"We could close down services and get rid of people, but people might not like that either - it's a challenge, it doesn't get any easier."

Crs Wayne Rice and Karen Hyslop voted against the rate hike, which also applies to council charges.

Cr Rice suggested a four per cent rise was appropriate.

"I believe with a bit more hard work and a bit more diligence on behalf of people associated with the preparation of this budget, we could bring these figures down to an affordable level for the community's benefit," he said.

Cr Rice said a lack of funding from other tiers of government had hit council hard.

"I think we are unfortunately being belted with the same big stick that the big city councils deserve to be belted with because they have wasted money over the years," he said.

Cr Rice argued a tighter budget would help council plead its case for funding from the state and federal government.

Cr Hyslop said she believed services could be cut.

"I don't agree that our rate payers want a five per cent rate increase and I don't believe we can keep putting our rates up to this proportion," she said.

"My rates for my house last year with capital improved value increased $437, and that's just one property."

Cr Emerson said savings had been made in the budget, including $1.5 million in the capital works program.

The full extent of any budget cuts was unclear yesterday, with the draft budget not available to the public.

Copies of the budget were not circulated at Monday night's council meeting, despite the agenda stating they would be.

Council staff did not provide the Mail-Times with a copy before the paper went to press.

Cr Jason Hosemans said the level of funding council received from the state and federal governments was appalling.

"The one size fits all attitude of state and federal politicians just doesn't work," he said.

"When they carry on about councillors overspending and being exorbitant in spending, it's just not the case in the smaller shires."

Cr Merilee Reid was also in favour of the draft budget, which passed five votes to two.