Andrew Wilkie says Canberra should no longer be Australia's public service capital.

The Tasmanian MP, former public servant and army officer has gone further than even the Coalition by arguing the Commonwealth public sector should be completely decentralised.

"The ACT has grown and it is a much different place," said Mr Wilkie, who had

"There is no logical reason anymore why the ACT should be the centre of gravity for the federal public service."

The relocation of Commonwealth civil servants throughout the country is shaping as an issue which could be brought into action before the next federal election.

Cities and towns across vast swathes of Australia are lobbying for Canberra bureaucrats to be parachuted in to boost their local economies, or for positions to be created for their own residents at the expense of the national capital's economy.

Mr Wilkie's comments strike at the heart of Sir Robert Menzies' vision for Canberra to be the nation's administrative capital which has continued unhindered for the past 60 years.

He has also put forward an argument Canberra-based politicians have disputed: that the territory's economy is diversified enough to cope without reliance on public sector employment.

Denison MP Mr Wilkie said he was "fiercely loyal" to his south-east Tasmanian electorate and Canberra could absorb job cuts, even though they would be disruptive.

"I'm not Canberra bashing," he said.

"[Tasmania] has the highest unemployment of any state.

"I note the ACT has the lowest unemployment of any state or territory."

Mr Wilkie last week spoke with Tony Abbott's parliamentary secretary Josh Frydenberg who will keep the Tasmanian politician updated on investigations into moving federal public service jobs to the Apple Isle.

Tasmania was already losing some federal public sector jobs as part of a national cull of 16,500 positions outlined in the latest budget.

The number was not yet confirmed but the Community and Public Sector Union (CPSU) has reportedly said there could be up to 500 culled in Tasmania.

The southern state was also in the process of reducing state public sector jobs in an environment where the youth jobless rate hit a whopping 18.2 per cent recently and the unemployment figure earlier this year was 7.6 per cent.

Mr Wilkie conceded he faced at least one challenge if public servants were relocated south.

The independent MP said he would need to push hard for jobs to be relocated to his electorate of Denison, as opposed to the two northern Tasmanian swing seats of Bass and Braddon.

Importing jobs into two northern seats could be more politically favourable for the Coalition, as opposed to Denison which had not had a Liberal representative since 1987.

Mr Wilkie said his seat, which included Hobart, deserved more of the jobs as it had lost more public service positions so far and already had significant infrastructure as well as many of the people with the skills to work for the Commonwealth.

He said there should be no limitation on the kinds of departments that should shift their workers to Tasmania.

Already the Abbott government has committed to relocating bureaucrats to the Central Coast and a parliamentary inquiry was being lobbied by communities across northern Australia to do the same at the expense of Canberra.

The ACT was already set to lose 6500 federal public service jobs by mid-2018, if the 16,500 positions cut across the Commonwealth bureaucracy are proportional.