A majority of councillors voted to endorse council staff's recommendation to place the 2022/23 draft operational plan and budget on public exhibition at Monday night's meeting, which included the rate rise.

The charge would boost the average rates payment of $1,335 by an extra $60.83 per year, according to figures from council staff.

The Independent Pricing and Regulatory Tribunal (IPART) is responsible for setting the maximum amount councils can raise rates - known as a rate peg.

For Shoalhaven, that rate peg for the coming financial year was set at 1.7 per cent, however council will now apply for a special rate variation of 2.83 per cent, bringing the rate rise to 4.53 per cent.

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"In recent years, council has only increased rates by the allotted amount as set by IPART," councillor Evan Christen said.

"And this has not been sufficient to deal with our increasing maintenance and operational costs.

"We are only just balancing the books ... due to financial pressure, it is critical that the special rate variation is taken up in the next financial year."

Speaking against, councillor Greg Watson warned the hike would further impact ratepayers struggling with the rising cost of living.

"There are so many people on income support in the Shoalhaven City area, and there are other people struggling to pay their mortgage," Cr Watson said.

"My preference would be for us to take the IPART allowance."

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Cr Christen acknowledged the rise would be "unfortunate timing" for some, but said the rise would improve services for the wider community.

"We do have a lot of people on a concession card in the Shoalhaven, but a lot of those will not be ratepayers," he said.

"There'll be people on very low incomes who are probably the highest users of our council services.

"What we're saying is ... the majority who can afford it can share the burden with those on the bottom of the pile who can't.

"I really ask people to think about who can pay, but also who needs the help."

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Shoalhaven Mayor Amanda Findley said councillors and staff had tightened expenditure where they could.

"Anything that we could cut internally, we did straight away," Cr Findley said.

"But our roads are in a mess. And if we don't do this rate rise, we will not be able to complete just the upkeep and maintenance of what we need to do."

However, councillor Paul Ell believed the budget could be tightened further, rather than asking ratepayers to "cough up the maximum allowable amount".

"I think the onus is on us as an organisation, as a council to demonstrate where we are able to reduce expenditure," Cr Ell said.

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Cr Findley added that the draft budget could not factor in the major parties election promise of $40 million to repair Shoalhaven's damaged roads, as it may be years before council sees the funds.

"We cannot guarantee a $40 million gift from the government ... there is no timeline on that money."

Council encouraged the community to provide any feedback on the draft operational plan and budget, which will be placed on public exhibition for 28 days.

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