Senator Barnaby Joyce attacked the decision on the Civic office move.

Senator Barnaby Joyce. Photo: Alex Ellinghausen / Fairfax

A federal government department says it has saved taxpayers' money by taking a 12-year, $70 million lease on a building in the heart of Canberra.

The Department of Regional Australia, Regional Development and Local Government says that while decisions on the location of departments are not made on price alone, it achieved a 30 per cent saving after looking at six Canberra properties.

Earlier, Nationals Senate leader Barnaby Joyce said the money to house the department could be used to buy an entire building or a whole block in a city with cheaper real estate, such as Hobart or Toowoomba.

The department's central office is in Garema Place in Civic, where it took the lease from last April.

If a Coalition government went ahead with a proposal to shift public servants to northern Australia, it would have to find the $70 million from savings if it forced the department to break the lease.

The department says it took a longer lease to make savings and that as a result, the cost on a per square metre basis is lower than for several of the department's leases for offices in regional centres including Orange and Wollongong. It also made savings because the building was already fitted out for a government department.

After Senator Joyce made his observations during a Senate estimates hearing, Regional Australia Minister Simon Crean said on Thursday the Nationals Senate leader was suggesting public servants be sent from Canberra to Hobart, and that this came just after the Coalition had released the discussion paper that proposes sending tens of thousands of public servants to northern Australia.

''Mr Abbott wants to force people north while his shadow minister for regional development [Senator Joyce] wants to send people south,'' Mr Crean said.

''Senator Joyce has shown that despite having representation all over the country, the Coalition has only one idea - to forcibly move public servants and their families.

''The solutions for northern Australia and Tasmania are in the strategies we've developed, not dividing Australia.''

Senator Joyce said departmental officials told the estimates hearing the cost of ending the lease would be its face value, with a maximum liability of $70 million.

''What about Tasmania? Would it be expensive to move [the department] to Tasmania as well?'' he asked.

After the dinner break, Senator Joyce told the hearing he had researched what could be bought for $70 million.

''You can buy, in Tasmania, whole blocks, multi-storey buildings in Queensland … but why wouldn't you use that $70 million and invest it in Tasmania and … you could buy a whole block in Devonport, you could buy a whole block in Smithton,'' he said.

Senator Joyce told Fairfax Media on Thursday a ''smart aleck'' remark at the hearing had produced interesting information.

''When [Tasmanian Labor] senator Lin Thorp asked the department whether it was possible to move the Department of Regional Development to north Queensland, obviously as a shot against the Coalition and my northern Australian development policy, I took it as banter but I got the answer they had just negotiated a $70 million lease,'' he said.

''Her attack gave reason for me to ask a range of questions … as to what could you get for $70 million because, call me old-fashioned, but that seems like an awful lot of money.

''In Toowoomba you could buy a whole multi-storey building and you could buy a whole block in towns such as Dalby. For half the money, you could buy some of the most substantial commercial real estate in Tasmania.''

Senator Joyce said he had not suggested relocating the department to Tasmania.

''That is completely and utterly wrong - what I was asking was, had a comparative analysis been done before locking taxpayers into a $70 million lease,'' he said.