I basically agree with all of what you say Nigel.
There are extreme pressures over finance. People assume the NT is rich. In reality it only has about 3 weeks worth of running costs in reserves (it is standard practise for most charities to aim for about 3 months worth) and has been severely hit by Foot & Mouth and stock market downturn (as other charities have been).
My initial feeling is that staff and council member do know that it's not worth allowing advertising for a few grand. Whether they realise that for the 'right' reasons is a different story (i.e. reasons of bad publicity rather than spirit of place) but it's a start.
I'll find out more, but it will take a while to talk to people and influence them to our way of thinking.