A contentious plan to permit government agencies, telecom companies and banks to use facial recognition technology has been heavily criticised by Federal Parliament's powerful joint intelligence and security committee.

The bipartisan committee has told the Morrison government to redraft the proposed laws allowing for the technology's use in Australia, with Liberal and Labor MPs demanding additional safeguards be added.

Liberal MP Andrew Hastie, the chair of federal Parliament's intelligence and security committee has criticised the government's Identity-matching Services Bill. Credit:AAP

Under the laws, driver's licence, passport and visa images would be stored by the Home Affairs Department in an "interoperability hub".

Committee chairman Andrew Hastie told Parliament "robust" safeguards and "appropriate oversight mechanisms" should be explained clearly in the legislation.