APS had 3581 employees in Tasmania as of March 31, compared with 3693 at the end of last year, 3822 in 2018 and 3982 in 2017.

The figure was revealed in a Senate Select Committee, but the APS Commission could not state how many staff were employed by labour hire companies because they "are not Australian Government employees".

In a letter, a Tasmanian labour hire employee who works at Centrelink said there was continued uncertainty about contracts ending, heightened demand and stress due to COVID-19, and no potential to become permanent APS staff, despite carrying out the same roles for several years.

Related: Direct APS jobs in Launceston reach record low

"I don't know with certainty that our contracts won't be renewed but with only three weeks to go and no real commitment from either party, there is a great deal of concern and stress amongst my colleagues and I," the letter reads.

"It is safe to say that if our contract isn't renewed, our sites will be only half-full for a while but then they will be filled with new intakes of more contractors that will have to go through new training.

"For that much collective knowledge and useful manpower to be thrown away just doesn't make economical sense."

The federal government introduced a cap on direct public service employees in 2013-14, which the Community and Public Sector Union claims has resulted in the increased use of labour hire companies, making jobs less secure.

CPSU regional secretary Zac Batchelor said labour hire staff did not have the same sick leave, holiday pay or job security as APS staff they work alongside.

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"The cap means regardless of how much work needs to be done, departments and agencies are forced to arbitrarily limit the amount of staff they can directly employ," he said.

"Local managers report frustration with the staffing cap and report issues with retaining corporate knowledge and expertise as a result."

The majority of APS staff in Launceston work at Centrelink on Boland Street, the Centrelink call centre in Kings Meadows, at the NDIA and in Home Affairs.

A federal government spokesperson said there were no plans to end the staffing cap, and that a "blended workforce" allowed for demand to be responded to more efficiently.

The falling APS jobs figure was also faster in other mainland locations compared with Launceston.