Mrs Chadwick said she knew Rotorua had all the advantages such as lifestyle and good links with air connectivity.
"It is a very good idea."
Rotorua Chamber of Commerce chief executive Darrin Walsh said it wasn't a silly idea.
"I don't think it is a dumb idea. If you put some of those in it will breathe some life in and it will I guess create some jobs."
He said there would also be benefits in having decision makers closer to Rotorua.
"We have the ability to cope [with the extra people]."
Mr Peters said the idea was a key part of New Zealand First's regional policy.
"The regions need jobs to boost their economies. Service industries and shops will flourish with more residents spending their money locally.
"Currently we have a country with the majority of jobs concentrated in overloaded cities.
"There is no reason in this age of advanced technology that government office jobs cannot be in smaller cities and towns."