Federal Sports Minister Kate Ellis says some of the millions of dollars in funding for Australia's elite sports people could be better spent.
A lower than expected gold medal haul from Beijing has prompted calls from sporting bodies for a massive injection of cash ahead of the London Games in 2012.
Australian Olympic Committee president John Coates has already started lobbying the government and is expected to seek at least $200 million over seven years.
The news of the push for funding follows a report suggesting taxpayers forked out $16.7 million in federal government grants for each of the gold medals won by Australia in Beijing.
The figure was in relation to the 13 gold medals Australia had won before diver Matthew Mitcham added another one to the tally on Saturday night.
It was also suggested the figure would be much higher once state government funding and spending on sporting infrastructure were taken into account.
Ms Ellis, who launched an inquiry into elite sports funding in May, said there needed to be a more efficient allocation of resources.
"I think the first thing that we do is we have a look at how the funding ... is being utilised and whether we are getting the maximum bang for every one of those taxpayer dollars," Ms Ellis told Sky News.
She said the federal government should look at strengthening funding partnerships with the states and reducing duplication between various sporting institutions.
"Are there ways that we can better cooperate and make that money go further? I think potentially there is," she said.
Ms Ellis said the government would hold talks with the Australian Olympic Committee over its push for additional funding.
"We're happy to have those conversations but obviously then that will be weighed up against the government's other priorities," she told ABC Television.
Ms Ellis said the funding review would also take into account Australia's performance in some Olympic sports compared to others.
"I don't want to criticise those other sports but certainly after every Olympics, and indeed every time we come round to a funding round, there will be serious work done analysing the programs that are in place."
While Australia exceeded forecasts by winning a total of 42 medals in Beijing, it's the lack of gold medals that has raised questions. The team won 14 gold in Beijing, compared with 16 at Sydney and 17 at Athens.
But federal Opposition Leader Brendan Nelson said the millions invested in on the nation's athletes was money well spent, adding that the government of Prime Minister Kevin Rudd should look at extending sports funding.
"It is value for money," Dr Nelson told the Nine Network.
"Every single Australian is immensely proud of the achievements of our athletes ... for all of those who have competed it has just been inspiring."
"I would be very happy to have some discussions with Mr Rudd and key members of the sporting community about what more we can do as a nation to support our athletes in an increasingly competitive world."
Dr Nelson said the coalition would support the idea of a national lottery as a way of funding sports, as is done in the United Kingdom.
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