Independent Senator Nick Xenophon has taken his campaign into the southern Queensland seat of Groom, calling for Defence to stop ignoring Oakey's "toxic water nightmare".

Groundwater in the small town, 154km west of Brisbane, has been contaminated by chemicals contained in firefighting foam that was used for decades in training activities at the local army aviation centre.

Senator Xenophon says the Department of Defence must pay for regular blood testing of residents and compensate landholders following a collapse in property values, as well as those with health issues.

“They can’t just keep ignoring this,” he said

“The issue is Defence has an obligation (to act) … are they worried about setting a precedent for around the country where they used these fire retardants?”

The firefighting foams contain perfluorooctanesulfonate (PFOS) and perfluorooctanesulfonic acid (PFOA) chemicals, which have been linked to adverse health effects including cancers.

The contamination at Oakey was the subject of a Senate report earlier this month, which received many submissions from residents concerned about elevated levels of the chemicals in their blood.

Brad Hudson, whose property is near the army base, said his five-year-old daughter already had a high level of PFOS in her blood.

“God knows how this will effect her in her future life,” he said in his submission.

“My levels are extremely high and concerning since I have already had testicular cancer at my age of 42.”

The Senate committee recommended the Department of Defence fund an annual program of blood tests for Oakey residents.

But Senator Xenophon said the department had only funded tests for 75 residents and was resisting paying for others.

His party’s Groom candidate, Josie Townsend, has vowed to make the Oakey contamination a key issue if elected.

Meanwhile, Shine Lawyers is investigating a potential environmental claim and legal action on behalf of affected landholders.