But departments are pushing ahead with high-end new building leases in Canberra worth hundreds of millions of dollars and the Coalition is insisting on new office blocks in regional NSW towns despite the hectares of empty space it is paying for in Canberra and other centres around the nation.

The government says the situation is improving and its efforts to do better managing the public service's vast real estate holdings have yielded $30 million in savings each year.

The latest Australian Government Office Occupancy Report, shows that progress is being made in reducing the hectares of empty office space around the nation being paid for by taxpayers.

Hundreds of thousands of square meters of office space have been offloaded and public servants are being squeezed into smaller spaces.

But the task remains huge, with nearly 2.9 million square metres of offices leased or owned by the Commonwealth around the country in 612 buildings in 219 suburbs and towns and nearly 14 per cent of it empty.

The Finance Department, which is charged with policing other department's real estate expenditure, moved into a new state-of-the-art building in Canberra's leafy inner south in 2016, in a deal set to cost taxpayers $376 million over 20 years.

The Immigration Department and Border Force has come under fire for its approach to the $250 million fit-out bill, believed to be the largest in Commonwealth history, for its new 87500 square metre multi-building headquarters in Canberra.

There is yet more controversy surrounding plans for developers to build taxpayer funded office blocks in Gosford on the NSW central coast and in Armidale in the north of the state to accommodate public servants who are being forced to move there by Coalition ministers to shore up the government's electoral positions in the surrounding seats.

But Finance Minister Mathias Cormann says his department's efforts, dubbed "operation tetris", to shed space and get better value from the remaining accommodation, is bearing fruit.

"The Government continues to ensure that the Commonwealth's property portfolio is appropriate to its expected needs and maximises value for taxpayers," the minister said in a statement.

"Operation Tetris is on track to realise savings of $300 million over 10 years, after the Government launched a coordinated approach to managing surplus property in 2015.

"Since the national roll-out, Operation Tetris has successfully filled over 60,000 square metres of vacant and surplus office space in the ACT and a further 7,000 square metres in other capital cities.

According to Finance's report, the empty desk situation is improving.

"The workpoint vacancy rate decreased by 7.1 percentage points since September 2015, 20.9 per cent to 13.8 per cent, whilst the total number of workpoints continues to reduce," the report reads.

"The decrease in vacancy rate is a result of continued successful efforts by entities to consolidate office accommodation and backfill surplus space, as supported by Operation Tetris."

Finance also says that 22 per cent of Commonwealth tenancies were meeting the "occupational density" goal of 14 square metres per public servant in 2016, a big improvement from just 13 per cent of tenancies in 2015.