Asylum seekers arriving by boat could top 50,000 a year, making a tough response to stem the rise unavoidable, Foreign Minister Bob Carr says.
Senator Carr said on Sunday while he had been attacked for describing recent arrivals as economic migrants many on the boats had actually confirmed they were not fleeing persecution.
He said on that basis they could not object to being resettled in PNG, a robust democracy with a free press and freedom of religion.
"The spike in the numbers of people being brought by people smugglers makes it unavoidable," he told Sky News.
"You have got 3000 people arriving a month. The annual rate is something like 40 to 50,000 a year if it continues at this level.
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"If it continues at this level - the prime minister was very persuaded by this - it could rise further as people smugglers really close in to make a financial killing."
Under the policy announced on Friday, all asylum seekers arriving by boat will be transferred to PNG for processing.
If found to be asylum seekers, they will be settled in PNG not Australia. If not found to be asylum seekers, they will be returned to their home country or a third country.
Senator Carr said refugee advocate groups and the Greens failed to grasp that the nature of the problem had changed and required a bold solution.
He said the new policy was brutally honest in conveying the message that asylum seekers could pay a people smuggler $10,000 and face great peril at sea but they still wouldn't be settled in Australia.
"The simple bold message is we decided where you are processed, we decided where you are settled and if you arrive by boat without a visa it is not going to be on Australian soil," he said.
Senator Carr said a second and important foundation of the policy was Indonesia's commitment to toughen its practice of granting Iranians a visa on arrival.
This meant Iranians would now need to acquire an Indonesian visa before departing Iran.
Shadow treasurer Joe Hockey said if elected, an Abbott government would try to make the deal with PNG work.
However, they couldn't strike such a deal from opposition, he added.
Mr Hockey also alleged people sent to PNG by Labor could end up on Centrelink and MediCare "for the rest of their lives" and that the advertising blitz to promote its deal before an election was "outrageous".
"Mr Rudd said back in 2007 that government advertising just before an election is a 'cancer' and he wanted to stop it," he told Network Ten on Sunday.
"Well, the cancer is alive and well under Kevin Rudd."
