The commission's report Transitioning Regional Economies cites the controversial move of the pesticides authority from Canberra to Armidale as a cautionary tale, warning that vital skills in highly specialised agencies can be hard to find in the the regions.

It is published on the day when the agency's chief executive will announce she is walking away from her job and will not make the move north.

While the Productivity Commission found that a government presence can make a difference in regional economies, citing the corporate watchdog ASIC's call centre operation in western Victoria, much of the time, the numbers of jobs involved were too small to make meaningful change.

"Although public sector agencies can operate effectively in regional centres, attempts to relocate employment as a form of regional assistance can have unintended consequences, and each instance needs to be considered in its own right," the commission writes.

"The nature of the skills required in relocation proposals is critical.

"Where the skill requirements are highly technical and specific, relocation to a region might diminish the organisation's effectiveness.

"It may be that the types of jobs required by the ASIC registry can be easily found in Traralgon, but finding qualified scientists for the APVMA in Armidale might be problematic."

But Nationals' Deputy Leader Fiona Nash, who launched an expansion of her party's decentralisation policy this week, said the PC's report was "praise" for her party's approach.

Sanator Nash said it was only natural that Commission was "not keen" on decentralisation but that was only because it looked at "things only through the prism of a certain strain of economics."

"The Canberra-based PC notes regional communities need to attract highly skilled workers, well, we need careers in the regions to attract those people," Senator Nash said.

"Regional communities shouldn't be seen as just economies, they're societies, made up of all kinds of people, families, children and values, not just numbers on the bottom of a balance sheet.

"I also think regional Australians have just as much right to a government career as Melbourne, Sydney and Canberra residents."

Chief Executive of the Regional Australia Institute Jack Archer was even more ambitions, claiming that pushing 100,000 public servants out of the big cities might pump tens of billions into the economy.

"For every additional 100,000 Australians who choose to live in regional rather than capital cities, the RAI estimates around $42 billion dollars will be released into the economy over the next 30 years through reduced interest payments on mortgages alone," Mr Archer said.

Meantime, the ACT Government confirmed on Friday that former APVMA boss Kareena Arthy, who quit the embattled agency on Thursday, will start working as Deputy Director-General of Enterprise Canberra, the government outfit that promotes investment in the territory, in early June.

Grain Producers Australia Chairman Andrew Weidemann told Farm Weekly the resignation would be a loss for the APVMA's move from Canberra because "they need a figure head to provide stability and someone to ensure the change of direction, to be based in Armidale, is well managed".

Industry lobby group Animal Medicine Australia paid tribute on Friday to Ms Arthy's efforts at the helm of the authority.

"Ms Arthy's efforts to improve the predictability and transparency of the APVMA have been appreciated, but these must continue to support the introduction of new veterinary medicine products for farm productivity and animal health." AMA Executive Director Ben Stapley said.