Canberra:??Opposition Leader Tony Abbott arrives to speak to the media at a morning doorstop at Parliament House today, Budget day, Tuesday 8 May 2012.??Photo by Penny Bradfield.


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Opposition leader Tony Abbott says as many federal public service jobs as possible should be located outside of the ACT. Photo: Penny Bradfield

Opposition Leader Tony Abbott says as many federal public service jobs as reasonably possible should be located outside the ACT.

He made the comment on Monday as economists warned of a possible 4 per cent cut in the ACT's employment rate if the Coalition won the election.

During an interview on Geelong radio, Mr Abbott was asked about a bid for the national disability insurance scheme to be based in the Victorian regional city and whether other government agencies could also be located there.

Mr Abbott said it would be up the board of DisabilityCare Australia to decide where the organisation should have its headquarters but some government agencies should be located away from Canberra.

''Big-spending government is not going to guarantee our prosperity; what we need are prosperous private businesses,'' Mr Abbott told BayFM.

''But to the extent that we need public servants - and we certainly need some of them - why not try to locate as many of them as we can reasonably locate outside of Canberra?

''So I'm all in favour of trying to ensure that at least some government agencies aren't in the national capital because I think it's important - particularly when they are service delivery agencies - for them to be amongst the people they are seeking to help.''

ACT Labor politicians lashed out at Mr Abbott's comments.

Canberra MP Gai Brodtmann accused the Opposition Leader of treating the public service and the national capital with disdain.

''Remember 1996 when house prices fell, we lost 15,000 public servants - and I was one of them - local shops shut down, businesses and tradies went under and people left Canberra. And that's the future vision that the Coalition has for Canberra,'' Ms Brodtmann said.

Fraser MP Andrew Leigh said Mr Abbott's comments were ''what you would expect to hear from a fringe separatist figure rather than a would-be prime minister and certainly from somebody who was minister for health when the Department of Health employed about the same number of people as it does now''.

A report by ANZ Research warned the ACT could be ''heavily negatively affected'' by public service cuts under a Coalition government.

''The Liberal-Nationals plan to cut around 20,000 jobs from the public service, a large proportion of which are likely to occur in Canberra as around 40 per cent of the workforce is either directly involved in public administration or the services that consult to it,'' the report said.

''We estimate there could be a direct 4 per cent cut to Canberra's workforce, which would have flow-on effects to other sectors in the ACT and nationally.''

The opposition has previously promised to cut about 12,000 public service jobs, doing so through natural attrition.

In February, Mr Abbott said the Commonwealth public sector had grown by more than 20,000 positions over five years without a commensurate increase in service delivery or efficiency.

The ANZ Research report said the possibility of a change of government was already hitting the territory's economy, with the housing market slowing and business and households acting cautiously.