Agriculture Minister Murray Watt announced on Wednesday that the Albanese government will leave the Australian Pesticides and Veterinary Medicines Authority in Armadale, despite a damning report last year recommended it be brought back to the capital.

But staff will be allowed to work from outside of the region and Mr Joyce, the local Nationals MP, was quick to point out that a number of new executives at the regulator - "surprise, surprise" - are based in Canberra, and that the new CEO did not have to live in Armadale.

"They're going to strangle APVMA by stealth," Mr Joyce said.

"We're seeing the vast majority of jobs now going back to Canberra."

He said his constituents had "fought so hard to get [the APVMA] relocated out of the citadel of Canberra" but that the government was threatened by decentralisation and that the public service could benefit from more jobs being moved to the regions.

Announcing the government's decision in Armidale, Senator Watt said the government supported many of the 33 recommendations of the Rapid Evaluation report, conducted by Ken Matthews, but said the regulator will be staying put.

"We are making a deliberate decision to keep the APVMA headquartered here in Armidale. I've got a report that recommends that it moved back to Canberra; if I wanted to do that today would be the day to announce that. We are saying exactly the opposite," he told reporters.

The minister added that he would be removing a "one-of-a-kind requirement in the public service" that APVMA staff be required to be based in Armidale.

He criticised the chaos of the original move, saying it resulted in a loss of 90 per cent of APVMA staff, and staff having to work out of the local McDonald's to access the internet.

Mr Joyce hit back, saying the former Coalition government had done "a very minor thing" by shifting "a small part of one department" to Armidale and that the Albanese government was threatened by decentralisation.

"Yet, they hated it - pathologically hated it - because it put under threat, they believe, citadel Canberra, and it said other parts of Australia were entitled to the largesse of the tax pie by having those well-paying jobs in other regional areas."

Senator Watt said: "We want the APVMA to remain headquartered here in Armidale. This building that we're standing here in still has 10 years to run on its lease. The APVMA is going to be here for a long time.

"I recognise that there's been a lot of work done by the new management to forge some really strong connections with the University of New England, as well, based here in Armidale to ensure that there's job opportunities for some of their graduates in scientific and other areas."

The minister released the final report into the future of the pesticides regulator and the government's preliminary response.

The Rapid Evaluation report had found that the decision in 2016 to move the regulator to Armidale was the source of its many troubles including poor culture, being too close to industry, and a loss of public sector values.

An earlier report by Clayton Utz, ordered after allegations surfaced in 2022 that a senior public servant had urinated on his colleagues following a staff Christmas party, resulted in the resignation of the APVMA's chair and CEO.

Mr Joyce said the government was using the regulator's workplace issues as "an excuse" to bring jobs back to the capital.

"There are issues about Parliament House in Canberra, for goodness' sake," he said.

"Are we shutting it down to move it elsewhere? I mean ... [if] this is a precondition to shutting down departments, then watch out Canberra - because every time there is a problem in any department, we have a reason now to to say 'shut it down' and move it to a regional area, because the culture in Canberra is just not right."

Senator Watt said: "I was shocked by some of the allegations that I heard about some of the behaviour of senior management in particular and some staff here at the APVMA."

"I want to be clear, the vast majority of APVMA management and staff have been great public servants doing their best work, but unfortunately, there were some terrible incidents and terrible allegations of misbehaviour that needed to be dealt with."

The report by Mr Matthews found that the APVMA has an extremely high level of staff turnover, which is the result of the workplace culture, unreasonable expectation to meet 100 per cent of time frames and the 2019 relocation from Canberra to Armidale.

Nationals leader David Littleproud said the government had unnecessarily kept the APVMA "under a cloud of uncertainty" for almost two years, noting that the decision to leave the regulator in Armadale went against the report's recommendation.

"While I am pleased Labor will keep the APVMA in Armidale, I am also concerned that allowing workers to be based in Canberra could move the APVMA by stealth," Mr Littleproud said in a statement.

"Minister Watt isn't doing enough to help and protect our farmers, while calling for multiple reviews and creating more uncertainty."

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In other decisions, the minister insisted the APVMA will remain independent and not moved into the Department of Agriculture as was recommended by Mr Matthews, while the APVMA board will not be abolished.

Addressing the forced element on the original move, the minister said the "one of its kind in the entire public service" restriction which required workers to be based in Armidale will be removed.

"Already nearly 40 per cent of APVMA staff are based outside Armidale, but it is my expectation that the majority of workers will remain here in Armidale at the organisation's headquarters," he said.

"The vast majority of that other 40 per cent are based in Canberra, with a relatively small number based in other locations as well."

Asked if he expects staff to start moving back to Canberra particularly over past allegations, the minister said, "I certainly hope not, that that doesn't occur. "

"The fact that I've come here to Armidale I think indicates that our government believes in Armidale, we believe in regional Australia, we believe in this institution, and we want to have the best possible workplace for people. And we want to have the most respected regulator that we possibly can," he said.