The News of the World newspaper phone hacking scandal has triggered global debate over media standards and the ability of people to seek redress from media outlets.
The federal government has issued a discussion paper on privacy laws in Australia, but has to date resisted calls from the Greens and some community groups for a broad ranging inquiry into media ownership and regulation.
Ms Gillard was quizzed on the issue at a caucus meeting in Canberra on Monday afternoon.
Labor MP John Murphy told the caucus the time was ripe for a media inquiry, given the increasing concentration of ownership and the “evasion of responsibility” by media bosses.
Mr Murphy said a “constructive” inquiry could be valuable in discovering more about how the media contributes to democracy.
The prime minister said she was appalled by the News of the World scandal but was confident there was no evidence of phone hacking in the Australian media.
Ms Gillard said she had confidence in a move by News Limited to conduct an audit of its journalistic operations.
But she said the two issues of concern in Australia were how to improve access for redress for defamation, particularly for people without the money to go to court, and whether new regulations are needed to deal with media convergence and changes in technology.
However she told caucus cabinet had yet to decide on whether to support an inquiry.