Prime Minister Kevin Rudd and NSW Premier Barry O'Farrell have clashed on the campaign trail over Labor plans to move naval assets from Sydney to Queensland.

An irate premier spent much of Tuesday detailing the devastating impacts of relocating the navy's east coast base from Sydney's Garden Island to Brisbane.

After bumping into each other in Sydney, the leaders shook hands but the premier warned the Labor leader his plan would "slash" jobs from the state's economy.

"A phone call would've been helpful," Mr O'Farrell fired at Mr Rudd during the showdown on the harbour foreshore.

The premier took up the fight again during question time, saying news of the move would have been "a devastating start to the day" for the 4000 people who work at the base.

The premier then urged the PM to "stop the selfies", referencing the Labor leader's immoderate use of his mobile phone on the campaign trail.

"These are not just for taking selfies. These are for calling premiers," Mr O'Farrell said.

"If he picked up the phone I could have stopped him from making a terrible mistake in this state."

Mr Rudd accused Mr O'Farrell of "huffing and puffing".

"The Royal Australian Navy is not Premier O'Farrell's property," he said in Brisbane later in the day.

"It is the property of the Australian government making national security decisions about where our defence assets should be located in the future."

Under Labor's strategic plan, the navy would be moved north over time, possibly to Townsville in northern Queensland and Brisbane.

But Liberal frontbencher Malcolm Turnbull, whose electorate of Wentworth takes in Garden Island, said it was a desperate bid for Queensland votes.

Meanwhile, Sydney Business Chamber director Patricia Forsythe said it would be best to share Garden Island between naval and cruise ships.

This would allow the cruise industry to continue to grow while "maintaining our strong historic and economic connections with the defence industry".

Tourism and Transport Forum chief Ken Morrison said it was essential to move the cruise terminal to Garden Island because Sydney desperately needs more berthing space.

"Cruising is the fastest growing part of the tourism industry and is predicted to generate $1 billion a year for the NSW economy by 2020," he said.

Deputy NSW Premier Andrew Stoner accused the prime minister of ignoring the recommendations of his own defence experts.

He also queried whether other military positions at Tamworth, Nowra, Wagga and Richmond were also at risk.

"It's a terrible, terrible sign that he would ignore the expert advice, the White Paper, just to save his own skin," he told parliament.

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