The head of the agriculture department was aware of rumours that animal activists paid for whistleblower footage of horrific conditions aboard a live export ship before allegations hit the media.
In January, The Daily Telegraph reported animal activists offered payments to a man for video from the Awassi Express, a vessel on which 2400 sheep died in October 2017.
Department secretary Daryl Quinlivan said there was not enough substance to investigate the claims before they were exposed in the media.
"There were rumours that payments had been made. Most people had heard those rumours but there was no evidence behind them," he said.
"There were a lot of stories circulating at the time."
Video from the Awassi, which showed sheep dying in their own filth, sparked widespread outrage after it was broadcast nationally.
The agriculture department is now investigating the conditions under which footage from the voyage was obtained.
The department is also investigating so-called "cash for cruelty" claims after the Telegraph reported a whistleblower offered to make conditions harder for sheep to make the footage look worse.
Animals Australia urged the man not to do anything which would enhance suffering.
Mr Quinlivan also said allegations the department intervened in an independent review of its culture and capability as a regulator were "false".
He pointed to a statement by the reviewer Philip Moss which said the assertion his final report was unduly influenced was not true.
