The Abbott Government is considering capping the length of time agencies have to process adoption applications to make it easier and faster for couples to adopt domestically and from overseas.

Prime Minister Tony Abbott is deciding whether to establish an inter-departmental committee to look at making greater use of federal diplomatic and immigration resources, as well as setting a time frame in which adoption requests would have to be finalised.

New South Wales raised the issue during the Commonwealth Heads of Government (COAG) meeting, Mr Abbott's first meeting with state and territory leaders since his election as Prime Minister.

Speaking after COAG, Mr Abbott said the issue was "very important" to a lot of people in the community and had been placed on the agenda for the next gathering due in April.

He said there was no doubt many children in Australia and overseas would benefit from a "good home" but that the system made it difficult to adopt domestically and from abroad.

"I think this is an issue that could benefit from attention at the highest levels of government," he told reporters.

"That's what it will be getting between now and the next meeting of COAG and hopefully we'll have something positive to say after the next COAG meeting."

It is understood the Prime Minister has long been keen to drive change in the area and make the system more transparent after watching a close friend wait nearly a decade to adopt a child from overseas.

He met a range of adoption advocates when opposition leader and more recently met the well-known adoption champion and actress Deborra-Lee Furness when she was in Canberra last month to promote National Adoption Awareness week.

But a Government source said the Prime Minister is acutely aware the issue is a sensitive one for many and any changes would be handled carefully.