Canberra Business Chamber chief executive Robyn Hendry said that as the national capital and seat of parliament, the ACT was the natural home for major Commonwealth departments.

Ms Hendry said the chamber demanded an evidence-based approach to decision making and called for assessment criteria to be released.

"Our nation's capital must continue to be Australia's centralised decision-making hub, the heart of policy creation," she said.

"Moving departments from Canberra will dislocate them from the very machinery of government, which seems to be less productive and effective.

"Policy development and implementation cannot happen in a vacuum; it needs input from stakeholders.

"Many industry NGOs are based in Canberra and contribute to development of effective policies."

Small business operators across Canberra expressed concern at potential loss of trade.

Paperchain Books employees Rebecca Worth and Rose Davidson estimated most of the store's customers were public servants.

"They've got a lot of disposable cash," Ms Davidson said.

"That's important. I think because a lot of graduates go into these positions [...] that's our big base," Ms Worth said.

"I can understand the reasoning behind it, because it would take jobs out to regional areas that need a bit of a boost, but Canberra's not a big city," Ms Davidson said.

"I think it's a romantic notion," Ms Worth said.

Caph's Restaurant owner Manuel Notaras estimated a third of his customers were public servants.

"It will kill the town. Wasn't Canberra built to be a public servant town," Mr Notaras said.

"It will kill business. If you take a large chunk of public servants out of Canberra, it will slow the economy down, it'll affect house prices, it will just be a domino effect.

"They're trying to fix Sydney's problem which is too many people, not enough homes."

Momento Dezigns co-owner Ross Eather said the transient nature of the Canberra workforce already created problems and there was a strong anti-Canberra attitude in other cities.

"There's a huge turnover of people. Moving whole families, that's another thing," Mr Eather said.

"It's really bad for retail. We're sort of barking up our own tree because people in Sydney and in Melbourne think it's a great idea.

"It's us against the world. Everyone thinks we're bigger than we are. I'm 101 per cent against it."

Kidstuff Manuka's assistant manager Imogen Youseman said one of the reasons the store was put in Griffith was the public servant foot traffic.

"It would also depend on, obviously, which department is moving. If they are within our local area then of course it will affect our business here," Ms Youseman said.

The Australian Hotels Association labelled the proposed relocation "un-Australian" and said it would devastate Canberra's hospitality sector.

Association president Michael Capezio called on the Nationals to rethink the policy.

"Canberra's hospitality and tourism sector heavily relies on the large public servant population who have proudly supported and enjoyed local licensed venues for many decades," Mr Capezio said.