He suggested the move of a large department with thousands of staff would have a bad impact on the local economy.

''I would argue very, very strongly against that,'' he said on Friday.

Mr Seselja, the former ACT opposition leader, is hoping to take the Liberal Senate spot formerly held by Gary Humphries.

Labor's Kate Lundy said an incoming Coalition government was poised to ''have a crack'' at Canberra by cutting the public service and shifting some public servants away from the national capital.

''This is a straw man that Tony Abbott has created so he can bash Canberra, so he can have a crack at the Australian Public Service,'' she said.

''[Businesses] don't need a hard hit that takes them into recession, they need confidence and stability.''

Senator Lundy and Mr Seselja were participating in a debate at the National Press Club hosted by the Canberra Business Council.

Both disagreed with the recommendation in a report to the federal government that the Canberra station for the high-speed rail link with Sydney be built at Civic. They said they were leaning towards a station at Canberra airport.

Opposition Leader Tony Abbott has promised to shift an agency of about 300 staff to Gosford and may move other public servants to northern Australia.

Cuts to the public service, and the flow-on effects on the Canberra economy, are the central theme in the battle to choose the ACT's two senators.

The Greens' Simon Sheikh is conducting a vigorous campaign to take the ACT's second Senate spot, which has always been won by the Liberals.

If Mr Seselja is elected, his first term will be marked by a reduction in the public service of at least 12,000 and the move of an agency outside the ACT.

''We're not talking about a large government department, the comment that was made was around 300 staff … I would prefer not to see that happen and I would argue against it,'' Mr Seselja said.

''I would be concerned … if [the Department of Families, Housing, Community Services and Indigenous Affairs] was taken away from Tuggeranong.

''I would argue very, very strongly against that … Tuggeranong is doing, the town centre is doing it tough and we know the traders would really struggle.''

Mr Seselja said both major parties had engaged in ''Canberra bashing''. He said Kevin Rudd once promised to take a ''meat axe'' to the federal bureaucracy.

Senator Lundy said Mr Abbott's approach to moving agencies out of the ACT underpinned his attitude to Canberra.