Tony Abbott says Australians want local industries to grow and exporting halal-certified goods to Muslim countries is part of that.
Tony Abbott is comfortable Australian companies are paying Islamic groups for halal certification, putting him at odds with two government MPs who want to curb the practice.
The prime minister believes Australians want to see certified agricultural businesses thrive by being able to export produce to Muslim countries.
"If we want our exports to grow all the time, this is what we need to do and I think that's what Australians want," Mr Abbott told reporters in Hobart following a visit to a halal-certified meat supplier on Monday.
That view isn't shared by some of his fellow Liberals, including Senator Cory Bernardi who wants an parliamentary inquiry into what he claims is a "racket".
He wants to clarify whether funds from the certification process were being funnelled into extremist organisations as had been the case overseas, he said.
Processors pay Islamic organisations to certify that foods are prepared according to Islamic law.
The issue is becoming more important as Australia seeks to kick-start talks on a free trade deal with the Gulf states, as well as boost exports to Asia.
Nationals MP George Christensen and independent senator Jacqui Lambie have also raised concerns, while a petition before parliament urges politicians to ban the practice.