A disgruntled customer has poured several litres of petrol through the waiting area of the Centrelink office in Burelli Street.
The incident happened around 2.20pm when a man reportedly poured between four and five litres across the carpet and threatened to set it alight.
The office was evacuated with 15 staff and customers rushing out onto the street.
The man was removed from the building by on-site security.
Police arrived and spoke to a 57-year-old man at the scene who was taken to Wollongong police station, where he is assisting police with enquiries.
Fire crews were called but there was no ignition of the petrol.
Fire officers ventilated the office with large fans and removed carpet tiles damp with petrol.
Two ambulance crews also attended but no one was injured.
More to come