One of Australia's most respected former public servants has called for a strategic approach to government decentralisation, warning regional cities could be too small to support transplanted workers without their own broad and viable labour markets.
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Kevin Rudd's pick to lead the Department of the Prime Minister and Cabinet, Terry Moran, said the National Party's latest decentralisation push should only force public service relocations to cities and towns where local workforces encompass the skill base of the new agency, citing state and federal decentralisation to Geelong as an example of successfully locating related agencies together.
A corporate advisor and former president of the Institute of Public Administration, Mr Moran said employment hubs in capital cities and major regional centres with good public transport links had proven to be ideal decentralisation locations for the Victorian and New South Wales governments over more than 15 years.
Public servants were not isolated professionally or personally and could pursue their public service career or seek external employment in related jobs, he said.
"In Victoria's case it has been happening for at least 15, if not 20 years, and typically the decentralisation occurs to major regional cities, such as Geelong, Ballarat and Bendigo.
"It is often done with the aim of creating an employment hub for people with the expertise that is relevant to a particular business or activity. In the case of Geelong, it has become a hub for government insurance bodies," Mr Moran said.
"The National Disability Insurance Agency has gone there, but also state government insurance activities like the Transport Accident Commission and Worksafe. Geelong is an example of where you can do decentralisation but in a way that doesn't limit the career prospects of the staff involved in the future."
The country's most senior public servant until 2011, serving Mr Rudd and Julia Gillard, Mr Moran has advised Boston Consulting Group on public sector reform and previously led Victoria's Department of Premier and Cabinet for eight years.
He said the co-location of agencies related to the federal Treasury - including the Reserve Bank, the Australian Prudential Regulation Authority and the Australian Securities and Investment Commission - in Sydney created a strong employment market for economists and lawyers.
When considered by government, moving departments and agencies out of cities including Canberra, Sydney and Melbourne could also help reduce population pressures.
"People in Sydney working for the RBA or the other big regulators, likewise in Melbourne with the Productivity Commission and the ACCC, aren't marooned because they can move into state government jobs requiring the same expertise, private sector jobs, or between related Commonwealth agencies.
"In Victoria, I think there was a secretary of a department who based himself in one of those regional cities, and occasionally commutes to Melbourne, rather than the other way around," he said.
The comments come as Turnbull government ministers are being required to justify why non-policy divisions of their departments and portfolio agencies should not be relocated to the bush.
Deputy Prime Minister Barnaby Joyce has faced ongoing criticism for moving the pesticides authority to his own electorate of New England.
Business cases for the next round of decentralisation will form part of next year's federal budget.
Last month, Finance Minister Mathias Cormann conceded the only significant detail about the plan to move agencies and departments was contained in a speech by deputy National Party leader Fiona Nash to the National Press Club and a doorstop press conference by Mr Joyce.
