Opposition Leader Tony Abbott has announced a multimillion-dollar asylum seeker policy, which includes the buy-back scheme in Indonesia.
The boats, likely to be bought from fishermen, would be destroyed to stop them being used for transporting people, according to media reports.
But Labor frontbencher Bill Shorten has rubbished the plan.
"You're going to have a three star military general writing cheques for every leaky boat in South-East Asia," Mr Shorten told reporters in Melbourne.
"This is crazy. The opposition are getting desperate.
"Wait until the news gets out throughout South-East Asia that if you've got a leaky unsafe boat that the Australian taxpayer is going to buy it off you."
The Gillard government's cash-for-clunkers program was aimed at getting older cars off the roads, but was scrapped just six months after being introduced.
