The government has said the agriculture ministry received a letter from the Australian Racing Board in 2004 and 2005 expressing concern over the alleged use of private veterinarians to monitor horse imports.
Trade Minister Warren Truss, agriculture minister at the time, said he ordered an investgation into the allegations and 'was assured that there had been no changes in the arrangements' for quarantine procedures then run by government veterinarians.
'We did not do that (use private vets to control quarantine), we haven't done it and therefore the concerns were unfounded,' he told reporters on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in Sydney.
On Monday Prime Minister John Howard denied that the outbreak could have been prevented by stricter quarantine guidelines.
'Because of the views of the breeders, arrangements were made for private sector vets to be involved in the process but they were acting under the supervision of government vets,' Howard told reporters.
'We were satisfied, at the time, that that was a proper arrangement,' he said.
Truss insisted Tuesday that 'the government has responded quickly and decisively in relation to this issue.
'We've established now an inquiry to make sure that all issues are effectively understood and that if there are things we need to do to improve our quarantine arrangements that they are taken promptly.'
He said he stood ready to appear before the inquiry if called upon.
'I say with a great deal of confidence that the government acted appropriately at the time the racing industry wrote to me regarding an outbreak of that influenza in South Africa,' he said.
Equine influenza is a highly contagious virus that is harmless to humans but causes respiratory problems, fever and sometimes death in horses.
In the last two weeks, an outbreak of the disease has brought racing in the states of New South Wales and Queensland to a halt with investigations focussing on a government-run quarantine centre on Sydney's western outskirts.