The Australian greyhound racing industry is responsible for the deaths of as many as 17,000 young dogs a year, an inquiry into live baiting has been told.

The inquiry, which opened on Monday in Sydney, heard greyhound racing in New South Wales is in crisis after the ABC's Four Corners program revealed the live baiting of greyhounds with small animals including piglets, possums and rabbits.

Counsel assisting the inquiry Stephen Rushton SC read from Greyhounds Australasia (GA) internal documents which revealed thousands of dogs were being killed every year.

"This industry is responsible for the unnecessary deaths of anywhere between 13,000 and 17,000 healthy greyhounds a year," the internal GA report stated.

Mr Rushton called the figures "a terrible indictment on the industry".

He added the numbers re-homed or retained by trainers was "statistically insignificant".

The RSPCA received a mere 410 greyhounds and managed to re-home just 154 of them over a six-year period.

"Why would an industry which is prepared to use small, vulnerable, helpless animals to blood its young greyhounds in pursuit of money care at all whether it bred too many animals?" Mr Rushton said.

"Why would it care if the animals which were surplus to industry needs be destroyed?

"And conversely, would an industry which kills thousands of young greyhounds every year without really batting an eyelid, care one jot about using live baits to train their dogs, be they rabbits, possums, piglets, kittens or chickens?

"Over-breeding and the industry's cavalier and committed attitude to it raise fairly and squarely the question of whether the greyhound industry can or ... should exist at all.

"Examination of this issue will necessarily raise the question of whether a greyhound industry can be sustained without the mass slaughter of young animals."

Regulator failed, 'should get running shoes on'

The inquiry heard the industry in NSW was in crisis, with Mr Rushton saying investigations suggested Greyhound Racing New South Wales (GRNSW) had never come close to discharging its regulatory functions.

Mr Rushton said intentionally inducing fear and pain in animals by using them as live bait was unacceptable to society.

"The imagery was hideous — the small animals used were clearly terrified, they suffered prolonged trauma," Mr Rushton said.

"Multiple greyhounds were permitted to maul them and to rip them apart at they were flung around training tracks.

"A number of people involved in the process appeared to find it amusing — they thought it was funny."

Mr Rushton said there was no doubt the imagery was seen as "barbaric and gruesome" in the wider Australian community.

"Those that saw the program or read reports of it were sickened — how could they not be? The practice of live baiting was universally condemned," he said.

Mr Rushton said there was no credible evidence to date that GRNSW and the industry could create an acceptable balance.

"The industry and GRNSW should get their running shoes on, some might say that they rather than greyhounds are now running for their lives," he said.

Mr Rushton was sceptical on the question of whether the culture of greyhound racing would allow animal welfare to be lifted to an acceptable standard.

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"For many years the industry has operated with an 'us and them' mentality," he said.

"The 'us' being owners, breeders, rearers (sic) and trainers and the 'them' being the public, welfare organisations, the Government and even GRNSW."

Mr Rushton argued the industry had no transparency because it had something to hide, pointing to a lack of recorded information about animal welfare under GRNSW's stewardship.

He said the failure to keep records had assisted the industry by enabling it to conceal matters from the public.

"The myth is GRNSW's public claims that animal welfare was number one. The reality is what I'm about to draw your attention to."

Inquiry to involve deep investigation of governance, standards

Mr Rushton said special inquiries and reviews in NSW, Queensland, Victoria and Tasmania had limited terms of reference.

Sorry, this video has expired GRAPHIC FOOTAGE: Possum used as bait for greyhounds at Tom Noble's property

He said NSW went further to establish the commission of inquiry.

The commission is required to identify issues concerning the governance integrity and animal welfare standards in the greyhound racing industry within NSW.

It will evaluate whether the issues it identifies can be addressed to permit the continuation of a sustainable industry.

It has so far received 80,000 pages of documents to evaluate and has held many private hearings.

Mr Rushton said the inquiry, headed by former High Court judge Michael McHugh, would have until the end of March 2016 to report.

Without concrete, credible changes industry should close: Rushton

With the opening remarks on Monday, the greyhound racing industry has been put on notice that its very existence depends on whether it can restore public faith in its ability to ensure animal welfare.

Mr Rushton said the viability of the greyhound racing industry did not turn on financial factors alone.

"Just as important, if not more so, the viability of the greyhound racing industry is dependent upon whether [it] has animal welfare standards in place which are acceptable to the community and in which the community has confidence will be applied and maintained," he said.

"A sport which utilises animals cannot operate without a social licence."

Australia is only one of eight countries world-wide where commercial dog racing is still permitted.

In the United States 39 states have banned commercial dog racing because it is financially unsustainable and because of serious welfare concerns.