Departments at a public hearing on Friday into the Coalition government's use of consultants and contractors left questions over their on-hire contractor headcount largely unanswered, as the size of the Australian Public Service's extended workforce of private labour remained unclear.

Government spending on contractors sourced through labour hire firms has ballooned in the five years since the Coalition came to power, a trend that has coincided with major cuts to the APS workforce and agency struggles to meet a cap on public servant numbers.

Victorian Labor MP and inquiry deputy chair Julian Hill pressed agencies - including the Australian Taxation Office, the Defence Department and the Department of Human Services - on contractor numbers but was told the information was not readily available.

He described their answers as "policy by anecdote", saying there were no systems to provide the figures despite a 2006 report recommending agencies clearly record their contractor use and spending.

"Until we can do that, we could come back year after year and we're going to have the same circular discussions," Mr Hill said.

"We're talking tens of thousands of human beings, some of whom are there for years.

"It's well accepted it's a more expensive way to procure a human being and we know there are thousands of these people in your departments. So how do you know you're getting value for money if you can't tell us how many there are, what they do, how much you're paying them and how long they've been there?"

Defence Department deputy secretary of the capability acquisition and sustainment group Kim Gillis said it measured contractor spending instead of headcount.

"We follow the dollars, counting sometimes the people is not the appropriate thing to do," he said.

Defence's contractor spending had climbed as its acquisitions rose and its submarines needed attention from short-term specialists, Mr Gillis said.

He told MPs the department would transfer skills from short-term contractors to its workforce before contracts ended.

"We're making sure those people are mentoring public servants and military so we've actually got a long-term transition," Mr Gillis said.

Defence's spending on contractors hired through panels last year was the highest among major agencies, growing to $155 million from $23 million in 2012-13 as its staff headcount fell by nearly 4000 to 18,400.

ATO chief finance officer Frances Cawthra told the committee using contractors gave it value for money as it managed peaks during the year, and that outsourcing gave it access to businesses that could ramp up their workforce quickly and used "state of the art technology".

"Our peaks and troughs are such that we have a massive increase in the services that need to be provided to taxpayers in tax time. For four months of the year we need an extraordinary number of people to help support us," she said.

The Tax Office has tripled its annual spending on labour hire through recruitment agencies, growing from $15 million to $44 million in the five years to 2017, a period which saw its workforce shrink by 4200.

Agriculture Department acting chief financial officer Scott Brown said it could determine its contractor headcount but that the figures were not in its human resources system, while the Human Services Department's Jonathan Hutson said changes to better track its contractor use would be ready late this year.

Since the change of government in 2013, annual expenditure on labour contractors for 18 of the largest workplaces has ballooned from $318 million to more than $730 million as the Coalition imposed staffing caps and shed public servants.

Agencies have revealed their spending on contracted labour to the parliamentary inquiry, which is investigating the Coalition government's use of contractors after a 2017 audit report showed its moves to cut 15,000 public service jobs coincided with a doubling in spending on consultants.

While the Auditor-General uncovered a growing spend on consultancy contracts for "specialised or professional skills", agencies have also detailed their growing use of contracted labour unrelated to consultancy work and commonly used for IT, engineering, recruitment and business administration.

Mr Hill and Labor finance spokesman Jim Chalmers said in a statement the Coalition had hollowed out the public service and forced government agencies to spend more taxpayer money.

"There's a time and place for expert external advice, but the Liberals' blowout isn't sustainable, especially when the budget's in such a mess."