A $7000 government bonus will be paid to NSW residents relocating from Sydney to a regional area.

But the scheme has divided farm groups, with the Victorian Farmers Federation labelling the plan “dumb”.

Sydney residents will be paid the grant if they sell their home and buy another in regional NSW for less than $600,000.

The scheme will cost the NSW Government an estimated $46 million a year for the next four years and fulfils an election promise, according to NSW Deputy Premier Andrew Stoner.

However, VFF president Andrew Broad savaged the scheme.

“It sounds like a dumb idea to me,” Mr Broad said.

“You don’t want to pay people to move to regional areas, you want to create job opportunities in regional areas.

“Healthy regional areas require three things: good educational opportunities, good doctors and good infrastructure and an environment for business to flourish.”

Mr Broad said people “go where the jobs are” and there was no point paying people to “go and sit where health standards are lower and there are reduced job prospects”.

NSW Farmers Association president Charlie Armstrong said the grant was a “small amount”, but a “genuine indication of a party prepared to push for decentralisation”.

“So, in that sense, we’re quite happy with the grant,” Mr Armstrong said. “We promoted the relocation of four major government departments to regional areas.”

The grant was part of a package of moves to assist decentralisation, although the moves were “way too late”, Mr Armstrong said.

NSW Treasurer Mike Baird said the grant would foster economic growth in regional areas and relieve congestion in Sydney.

A Victorian government spokesman said it had extended the $6500 bonus for people buying a new homes in regional shires.

“Coupled with cuts to stamp duty for first home buyers, this policy has the dual benefit of encouraging people to not only live in regional Victoria, but to also invest in regional areas, boosting local economies and providing jobs,” the spokesman said.