As many have pointed out, Canberra exists because of a federation compromise to create a greenfields capital in a regional location.

Australia was much more decentralised in 1927 when the future King George VI officially opened parliament in the new city.

We still rode on the sheep's back and state capitals weren't as dominant as they are today in terms of population.

The process announced this week by Nationals deputy leader Fiona Nash is actually a good one.

Departments need to either indicate they're suitable to move to the regions or justify why all or part of their operation is unsuitable.

No decisions have yet been made and presumably there won't be much of a business case for moving bigger departments and policy-making responsibility out of Canberra.

It makes more sense to move service delivery functions out of Sydney and Melbourne, where population pressures are also greater.

But there may be smaller agencies and some services that could just as easily be delivered from Orange or Bendigo as Canberra. Let's wait and see.

The push to decentralise has a long history in Australia with broad support from both sides of politics.

The 1964 Premiers Conference set up the Commonwealth/State Officials' Committee on Decentralisation, which submitted its final report in 1972. The debate didn't focus on whether decentralisation was desirable, but whether it should be dispersed or concentrated in particular areas.

A Department of Regional Development was established and Gough Whitlam's Labor government adopted a national growth centre policy which led to investment in regional centres such as Albury-Wodonga.

Governments changed, progress stalled and economic rationalism prevailed under prime ministers Keating and Howard.

Moving people costs money. It's not generally popular with the people who are being moved and these people vote.

However, various studies have shown there's a potential economic net benefit.

It's also in the national interest to have a widely spread population and lower housing demand in Sydney, Melbourne and Brisbane.

A Regional Cities Victoria report by Essential Economics in 2009 concluded net state benefits were associated with redistributing population growth from metropolitan Melbourne to country cities.

There are fewer political and economic impediments to establishing new agencies and services in regions and this is where governments have dabbled tentatively in the past 25 years.

ASIC's information processing centre was set up at Traralgon in the early 1990s. The NDIS headquarters are currently being established at Geelong.

The Regional Australia Institute has done research that shows for every additional 100,000 people who choose to live in regional areas rather than capital cities, about $42 billion will be released into the economy over the next 30 years through reduced interest payments on mortgages alone.

This week's announcement was the strongest commitment by any government to decentralisation since Whitlam.

It shows resurgent National Party influence under Barnaby Joyce and political acceptance by the Liberals who presumably recognise the One Nation threat in regional Australia.

Joyce today hosed down some of the concerns that followed his deputy's statement yesterday. Treasury won't be moved to Albury, Agriculture's head office will stay in Canberra; whole departments won't be relocated.

He talked about sections of agencies being shifted to the regions, which hardly seems a radical notion if it's done thoughtfully.

The ACT shouldn't waste its limited political capital on vehemently opposing a policy where the detail remains unclear.

There are plenty of mandarins in Canberra who know how to play the game and achieve compromise outcomes.

Regional Australia, the Nationals and country Labor MPs will be happy to score a few wins and Canberra doesn't need to be harmed in the process.

Canberra Times senior journalist Michael Gorey is a former editor of the Kalgoorlie Miner, The Border Watch and Centralian Advocate.