In a stinging "slap in the face for Canberra" 600 Commonwealth public servants will be relocated to the Central Coast, half of whom will come from the already embattled Australian Tax Office.

It comes as ATO bosses warn the tax office faces more work collecting Treasurer Joe Hockey’s new taxes, with fewer workers to carry the load.

Commissioner of Taxation Chris Jordan says the ATO’s workforce should brace for years of job loss pain following Tuesday’s budget. Unions say hundreds or even thousands of tax officials will be forced from their jobs around the country as the ATO cuts another 2100 workers in the next seven months and the tax collection agency will be plunged into “turmoil”.

The federal government will open a new building on the Central Coast to boost jobs in the region dominated by Liberal MPs, even though the nation's capital could already be hit with 6500 or more job cuts in three years as the bureaucracy loses 16,500 positions nationally.

Accounting, information technology, professional services and legal roles could be some of the job descriptions to relocate. 

Not all the 600 jobs will come out of Canberra, according to a spokesman from Treasurer Joe Hockey's office, who said the ratio "has not been determined yet", but others expect Canberrans will make up the vast majority.

The spokesman also said it was not yet known which other departments would relocate staff to the Central Coast.

Canberra MP Gai Brodtmann said the decision was a slap in the face for Canberra, which went against the vision of the national capital being the home of public servants - a vision consolidated by the Liberal party half a century ago. 

"Today, we learn that it is also moving hundreds of public service jobs out of Canberra,” she said.

"Sir Robert Menzies said we must 'build up Canberra as a capital in the eyes and minds of the Australian people.’ It was he who moved public servants from Melbourne and Sydney to Canberra.

“What the Abbott Government has done to Canberra in the last 24 hours is a betrayal of Menzies’ vision and a betrayal of his profound understanding that public servants make an invaluable contribution to the economy and society.”

ACT Liberal Senator Zed Seselja said the decision by his party would still allow all workers to choose if they wanted to relocate.

"Whilst I will always fight to keep jobs in Canberra, I have been assured that it will not be a substantial number that come from Canberra," Senator Seselja said.

"It is important that we keep the heart of the public service in Canberra, as our city is experienced and skilled in the area of public administration and serves the government with expertise."

An ATO spokesman said the tax office would take the lead in the relocation project, which would take a number of years to complete. 

Robertson MP Lucy Wicks said the building would be built in Gosford, adding "we want this to happen as soon as possible". 

"These 600 jobs will drive even more activity to local cafes, local restaurants and local businesses," she said.

Prime Minister Tony Abbott first flagged his intention to relocate bureaucrats while campaigning in August last year. 

His comments sparked fears across the public service about which departments or agencies would be targeted to help boost regional economies. 

Meanwhile, in an email bulletin sent to all staff on Tuesday evening, Mr Jordan told workers 2100 jobs would have to be culled by October 31.

“This is in addition to the expected 900 exits from natural attrition and redundancies in 2013-14 and will take to 3000 the number of staff exits from the ATO since July 2013,” the commissioner wrote.

Mr Jordan told his workforce that the temporary budget repair levy, the scrapping of some tax offsets and tax concessions, fuel duty indexation, the deferral of superannuation guarantee increases and changes to super contributions would all add up to extra work for the tax office.

“In most instances the cost of implementation will be absorbed by the ATO,” the commissioner said.

Mr Jordan warned the sackings would not end this year, with more job cuts contained in the budget’s plan for the four-year forward estimates period.

“The budget papers signal further reductions in the out years,” he wrote.

“The changes to funding and staffing are significant and will require us to reassess all of our business to find where we can make savings and reductions.”

Australian Services Union organiser Jeff Lapidos said the Tax Office would not be able to manage the job losses without forced redundancies.

“A 2100 reduction in staffing will require compulsory redundancies,” the union official said. “The budget does not appear to provide any additional money to the ATO to pay for these redundancies.

“Turmoil is about to strike the ATO.”