Councillors voted to approve a progress pride flag mural at the high-profile intersection outside Town Hall ahead of March's Bendigo Pride Festival.

Cr Matthew Evans said it was more than a show of support for LGBTIQA+ community members, saying a 2019 active living city found many had low life satisfaction.

"One in four ... did not feel valued. It is tragic that anyone in our society would feel that they were not valued or didn't feel they were of value to anyone," he said.

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"Previously, I've spoken about the importance of being kind and that one small act of kindness can make the difference in people's lives.

"It is more than the artwork itself, it is the act of kindness itself."

Cr Jen Alden said symbols mean a lot.

"We claim to be welcoming so when the rubber hits the road, so too should the progress pride flag," she said.

A previous council report warned that a failure to support the project could expose the city to allegations of tokenism, given it had vocally supported pro-LGBTIQA+ stances in the past.

Cr Greg Penna objected to the plan over concerns about its cost to ratepayers.

"My opinion, and it's the opinion of others, is that Council should not be supporting this motion as I feel it is a focus on an area and a topic of a minority group," he said.

"The money set aside for this project is better directed at our core responsibilities."

Bendigo's council will spend $8229 on the project, which includes artist fees, material, traffic management and an $80 permit.

The money would come from existing council department budgets.

Cr Penna was also concerned that it would expose the council to "all and sundry" to support their projects with ratepayers' money.

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Cr Evans acknowledged concerns but said there were bigger issues at stake.

"As someone who is not a member of that community - I can't speak from personal experience - I know from when I speak to people of the LGBTIQA+ community that it is something that is important to them," he said.

"It's not to the exclusion of anyone else, but it makes that much of a difference.

"Call it a one percenter, call it whatever you will, but it does mean something to someone and it is an important project worth pursuing."

The same intersection was the scene of a separate mural in 2019 that encouraged motorists to slow down for pedestrians, which was installed with the council's approval.

The motion was carried with the support of councillors Andrea Metcalf, Matthew Evans, Jennifer Alden, Margaret O'Rourke, Julie Sloan and Rod Fyffe.

Cr Penna was the only councillor at the meeting to object.

The progress pride flag was commissioned by America's first openly gay politician and San Francisco councillor Harvey Milk.

It was quickly adopted following Milk's assassination outside that city's town hall in 1978 as a symbol of action.

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