Gunnedah's councillors voted for Gunnedah Shire Council to allocate $3000 to the Australia Day events budget annually to help villages host activities in their own communities.

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The original motion was to allocate $3000 for 2020 activities but councillor Murray O'Keefe led the charge to make funding help available annually for "eligible" events.

"I can see that there is support for the officer's recommendation in the room and I think it should be available annually ... but I'd hate to see a situation develop where it becomes an expectation that funding is available," Cr O'Keefe said.

"Funding should be there to encourage competition between our villages and other community groups to ... put on events and outreach activities on Australia Day in our villages."

Cr Rob Hooke supported the motion, commending his fellow councillor for "his foresight in making it a permanent part of the budget for the calendar years ahead".

The council's corporate and community services director Colin Formann said it was a plus for planning purposes because it meant staff could get started earlier.

Mr Formann said the idea was originally put forward by the Australia Day Working Group last year and villages including Tambar Springs, Carroll and Mullaley jumped on board and used funds to organise barbecues, yabbie races and jumping castles in January.