Prime Minister Kevin Rudd has concerns about Scientology but says the government will exercise caution in examining allegations of abuse levelled against the church.
Mr Rudd says the government will consider the need for a formal inquiry into the church - and its tax-free status.
South Australian senator Nick Xenophon used parliamentary privilege on Tuesday to castigate the church, labelling it a criminal organisation hiding behind so-called religious beliefs.
Tabling letters from eight former followers, he said there was a worldwide pattern of abuse and criminality associated with the church, best known for its celebrity devotees and rejection of medicines.
Senator Xenophon was shocked at the whistleblowers' allegations, which included sanctioned beatings, imprisonments, forced abortions and fraud.
One man claimed he was ordered to physically abuse members, keep them isolated from their families and told to go through the personal information of celebrity followers as a form of blackmail.
The church has also been accused of trying to cover up murders and sexual assaults.
"These are grave allegations," Mr Rudd told reporters on Wednesday.
"Many people in Australia have real concerns about Scientology. I share some of those concerns."
Senator Xenophon is canvassing support for a parliamentary inquiry. The Greens have backed the move, the Liberals have not and the government has yet to decide.
"I don't rush into any judgment on this," Mr Rudd said. "We would like to proceed in a cautious and methodical way in examining those matters ... and then we'll decide what, if further, parliamentary action is necessary."
Later on Wednesday, he backed the legal framework by which the church had been granted tax-exempt status, saying it had the approval of the taxation laws and the taxation commissioner.
The Church of Scientology has denied the allegations - calling them a coordinated effort to discredit the church - but says it will cooperate with police if a formal investigation is launched.
The Australian Federal Police, having met with Senator Xenophon on Monday, say the allegations are a matter for NSW police.
NSW's State Crime Command could not confirm receipt of correspondence from Senator Xenophon or what action it may take.
Meanwhile, the church's Australian vice-president, Cyrus Brooks, took aim at Senator Xenophon for refusing to respond to repeated requests for a meeting.
"He didn't answer a single letter, he didn't talk to us, he didn't meet with us, so he's suddenly brought up these things," Mr Brooks told Fairfax Media.
"It's a bit disingenuous of him to do so without even meeting us."
But a spokesman from the senator's office said only one letter had been sent, in July, which a staff member had unfortunately not relayed.
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