The new building will enable the museum's vintage horse-drawn vehicles to be displayed and create a specialist storage space for the museum's collection.
"The benefits of the new building will bring a new profile to the museum as an important visitor attraction in Greytown and the wider Wairarapa," he said. South Wairarapa Mayor Adrienne Staples and councillors agreed helping the museum was important.
"It's probably one of the most major developments in the district," Mrs Staples said.
Councillors made more conservative decisions on the rest of the submissions.
Wellington Free Ambulance is set to get $4500 of the $12,000 it requested.
It took precedence over Destination Wairarapa's request for extra funds to help it run a tourism conference in August.
"Visitors are incredibly important to Wairarapa, but so is an ambulance service," Mrs Staples said. "An ambulance service is far more critical to our local residents."
The Wairarapa Arts Festival Trust made a request for $15,000 to go towards the first Kokomai Creative Festival, but was granted $5000.
Mrs Staples said the council was "not into taking money off ratepayers for events".
Many other big ticket requests were declined, including Rangitane o Wairarapa's request for $20,000 to run a four-day Rangitane event.
NZ Festival's $3500 request and The Bee Friendly Farming Group's request for up to $5000 were also declined.
Martinborough Business Association asked the council to revive the Sunday bus service between Featherston and Martinborough.
Deputy Chair Frank Cornelissen said not having the bus was bad for tourism.
"We believe that the loss of this service is having a negative impact on weekend tourism in Martinborough.
"We have seen a reduction in weekend stays by younger Wellington residents and a reduction in Sunday day trippers."
The council agreed this was a concern and would investigate what could be done.
SWDC acting CEO Paul Crimp said the overall rates increase is on track with its initial proposal of 3.87 per cent.
Key projects in the draft plan include spending $100,000 to upgrade three summer outdoor pools, earthquake strengthening the Martinborough Town Hall and managing waste water and water supplies.
$40,000 was also set aside for running local government elections this year.