The federal government has been steadily increasing its office space across the public service while reducing the amount it uses, a yearly government office occupancy report has shown.

The Finance Department report released last month showed more than 40 per cent of public service agencies were now compliant with space wastage rules - an increase of about 10 per cent compared to the 2019 reporting period.

Eight years after former finance minister Mathias Cormann first took up his war on government wastage and unused space, more than half of the government's 187 agencies are still not hitting the targets.

Stephen Oxford, a government leasing expert at Australian Strategic Property Advisers, said a change in the fine print had delivered even more favourable figures for the government.

The COVID-19 pandemic drove public servants to home offices, making it tougher to report on office space being used.

Instead of manually reporting the number of staff sitting at desks, agencies and departments were allowed to provide a headcount based on payroll and human resources data.

The changes added an additional 13,000 staff to leases despite only a little more than 2000 new positions being created in the latest federal budget.

Mr Oxford said it suggested improvements in top-line figures were as a result of methodology adjustments rather than actual performance.

"Maintaining consistency with data collection is important to enable analysis of performance," he said.

"Changing the methodology and reporting improvement may look like the policy is at last having an impact but in reality, it is hiding the truth.

"The consequences of achieving compliance with the government's current policy would result in over $200 million in savings each year."

A Finance Department spokesperson said the impacts of COVID-19 meant traditional methods for calculating staff physically at desks had to be discarded.

It defended the change in reporting methods as necessary, adding it would not affect comparisons with earlier data.

"The historical data presented in the report, for the period 2011 to 2018, has been adjusted to account for this change. As a result, all time-series data in the report is comparable," a spokesperson said.

"This is a long-standing reporting option, which has been widely used. Removing the physical headcount option is not expected to have a material impact on the data."

Government office leasing is big business, with the yearly bill often reaching well into the billions.

Since January, at least $800 million in leasing contracts has been issued across agencies, the government's tender site revealed.

In Canberra, where the government holds 25 per cent of its tenancies, the net leasing cost reached $609.3 million for the 2019-20 financial year.

It's an area successive governments have eyed as being ripe for cost-saving measures but despite an eight-year crackdown, many public service agencies continue to use considerably more space than industry standards dictate.

In July, The Canberra Times reported on the Australian Taxation Office's newly-signed 52-month lease for $25 million.

The 8386-square-metre office space in regional Victoria will house little more than 220 employees. Each staff member could have up to 38 square metres each - a figure more than three times larger than the government requirement of 14 square metres.

The bill is estimated to cost taxpayers about $484,000 per month over the four-year period.

READ MORE:

Mr Oxford said the COVID-19 pandemic was the perfect time for the government to take stock of its existing approach to physical offices and reassess what was needed.

With the public service commission flagging an increase to working from home flexibility beyond the pandemic, the result could mean millions of taxpayer dollars being saved, he said.

"There are legitimate questions that this report should trigger, such as why the government is increasing its number of leases, work points and floor area in an environment where its workforce is not expected to grow long-term," Mr Oxford said.

"In an environment where staff are seeking greater flexibility to work from home, and hybrid workplace models are emerging, surely this is the opposite of what we should be seeing with the government's portfolio.

"This is a once-in-a-lifetime opportunity to take the lessons learnt from the last 12 months, embrace remote and flexible working, to revisit the government's workplace policies and achieve significant savings for government."

Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: