The Centre's director of legal advocacy, Dr Aruna Sathanapally, said the database of proposed images would include the majority of the populace.
“In other countries, there is serious debate about the police retaining the images of innocent people," she said on Tuesday.
"Yet, here in Australia, our government is proposing letting not only police, but government departments, local councils, transport authorities and even private companies, access and search for matches across a database that will collate Australians’ personal information, linked to a biometric profile of their face.”
The face matching services will include face verification service, face identification service, one person one licence service and a facial recognition analysis utility service. Privacy groups have criticised the proposal.
The Centre questioned whether there was evidence to justify these expanded powers and sought detail on how the government proposed to regulate the face recognition capabilities.
“Facial recognition and biometric technology threaten to outpace the laws we have in place," Dr Sathanapally said.
"What the government is proposing would effectively leave the rules governing new, powerful forms of surveillance to be worked out by the Home Affairs department and in the hands of the Home Affairs Minister (Peter Dutton).
"Frankly, this isn’t good enough for such a dramatic new set of powers, not in a democracy."
The proposed law also posed risks to freedom of expression and other democratic rights, the Centre claimed.
Dr Sathanapally said: "Those attending a public meeting, a protest or a vigil should not have to reveal their identities to exercise their democratic right to engage with others and gather peacefully."
She said that there were doubts about the efficacy of face recognition technology, pointing out that during a recent police operation at the Notting Hill Carnival in London up to 98% of the results had wrongly identified people.
“We need to tread carefully with technology that carries high rates of false matches in general, and in particular, when faced with an individual belonging to a minority ethnic group," Dr Sathanapally said.
"When false matches are made, innocent people will suffer the consequences, and already disadvantaged minorities may bear the brunt of this. These new tools risk eroding trust in government agencies, law enforcement and security agencies unless we have robust testing and safeguards in place.”
The Centre's submission to the inquiry is here.