Museum manager Paul Horner said it would take an estimated 20 man years of work to do the job.
In a report to the city council this month, he said there was enough work to keep four staff fully occupied for five years recatologuing, digitising, reshelving and packaging items for protection.
Unless the collection was properly catalogued it could not be moved, and items could not easily be used in exhibitions, he said.
"If you want to use an item in an exhibition, you have to know exactly what you've got and whether it is relevant.''
The 72,000-plus catalogue listings covered millions of individual items, including more than one million heritage photographs, he said.
Digitising photographs would enable them to be shared with the community.
There are plans to redevelop the gallery's buildings on the fringes of Queens Park, Invercargill, but Mr Horner said proper cataloguing needed to happen irrespective of whether redevelopment occurred.
He said the extra $600,000 per annum requested would be used for two collection technicians ($100,000), two curators ($140,000), training, technology and equipment ($60,000), exhibition development ($100,000), collection cataloguing and storage costs ($100,000), and operational budget catch-ups ($100,000).
This year the museum received grants of $619,000 from the city council and $896,000 from a regional heritage rate collected across the city and the Southland and Gore districts.
A proposal earlier this year for all three councils to increase the annual rate from $35 to $50 per property did not find favour, although the city council has agreed to increase its rate to $40 per property from July 1.
The Southland council will decide soon whether to do the same. The Gore council decided against an increase.
The heritage rate is allocated by the Southland Regional Heritage Committee, chaired by SDC councillor Paul Duffy.
Mr Duffy said he understood Mr Horner's frustration and sympathised with him, saying he would personally support perhaps $100,000 of the committee's cash reserves going to SMAG as short-term assistance.
Relocating SMAG to the Invercargill CBD has also been mooted.
Mr Horner said he was "neutral'' about relocation, but hoped the debate would be the "circuit-breaker'' to solving cataloguing and operational funding issues.
