The Prime Minister, John Howard, has vigorously defended the terms of reference of the AWB inquiry, saying there is no need for Commissioner Terence Cole to have the power to investigate ministers.
Yesteday the solicitor assisting Commissioner Cole rejected calls the federal opposition's request to broaden the inquiry, saying it would be inappropriate.
Labor's foreign affairs spokesman, Kevin Rudd, says it's clear from the response that the commission can't do its job.
But Mr Howard has repeated the inquiry has all the powers it needs to investigate AWB's $300-million dollars of payments to the former Iraqi government of Saddam Hussein.
He says the inquiry turns completely on whether the government was told or knew at the time that kickbacks were being paid, and Commissioner Cole has the powers to establish that.