Gunnedah Shire Council's new Community Resilience Program is a "bold initiative", the new chamber of commerce president says.
Juliana McArthur has praised the council for the new program, which aims to try and stimulate the economy in the ongoing drought.
"It's important in these times that small business and primary producers are supported, and infrastructure projects and the like," she said.
"Infrastructure projects and the like that council may support are going to have a positive impact on the local economy."
At last week's meeting, councillors voted to allocate $1 million funding for the program for this financial year and will lobby the state and federal governments to match that amount.
They also voted to focus on funding projects, which engage local suppliers, contractors and labour.
Mrs McArthur said she was glad to see the council place emphasis on using local suppliers and businesses and "it would be good if state and federal government follow suite".
"I think that the federal government should be trying to spend local where they can," she said.
"If they've got a decentralised office in a regional town, they should use local businesses or at least give those local businesses the opportunity to tender for work or supplies or goods."
The president said "rates relief" for businesses "during a disaster like this one" would be a "really straight-forward way" that the council could be "putting money back into the pockets of locals who do spend locally".