first off, to be a bit of a henpeck, its best NOT to use just the <background>
tag. rather, use the proper, more specific, <background-image>
tag.
the only way that i'm aware of to do such a thing is to build the padding into the image by extending the matte. since the empty pixels aren't stripped, you have your padding right there. so if you need a 10px border, create 10px of empty pixels all around your image. this is mui simple in Photoshop, Fireworks, GIMP, &c.
i'd also recommend trying out the PNG8 format instead of the dying GIF... much better.
there may be an alternate solution to your problem if we knew a bit more of how you're using it. :) it LOOKS like you're trying to add an accordion button. this would be best placed in the HTML because then you can target it with JavaScript/PHP; something you cannot do if it's in the background (at least not simply). in such a case, you can style the heck out of the image you currently have in CSS by using the following:
#hello img { padding: 10px; }
WR!