Australian businesses are not doing enough to tackle slavery in their supply chains, a federal inquiry has heard, but big companies have warned against "overly prescriptive" laws in a bid to stamp out the problem.

Submissions to the joint committee looking at establishing a Modern Slavery Act in Australia has backed introducing new laws to force big companies to report on modern slavery in their supply chains. The joint standing committee on foreign affairs and trade was asked to look at the issue by Attorney-General George Brandis, and is this week holding hearings in Melbourne.

There is business support for introducing a Modern Slavery Act in Australia to force major companies to report on modern slavery in their supply chains. Credit:Felipe Dana

The 2016 Global Slavery Index estimated that 45.8 million people in 167 countries are victims of slavery. Two-thirds, or 30.4 million of these people, are in the Asia-Pacific region, with more than 4000 in Australia.

Business lobbies and companies acknowledge that more needs to be done to address the problem, but remain concerned that Australia may end up with laws that place stricter requirements on companies than is the case in other nations such as Britain, which has a Modern Slavery Act.