Immigration Minister Chris Bowen has defended the practice of detaining people found to be refugees but lacking security clearances.
There are 462 confirmed refugees still awaiting the results of assessments by the domestic security agency ASIO.
Some are in community detention but others remain in detention centres on ASIO's advice.
This ruling applied to a Tamil man in Sydney's Villawood detention centre who committed suicide early on Wednesday.
He had been granted refugee status in August but ASIO had advised the government it would not be appropriate for the man to live in community detention while awaiting his security assessment.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
On Thursday, Mr Bowen said the government had substantially reduced the amount of time it took to process asylum seekers.
More than 60 per cent of people in detention had been there less than 12 months.
The minister rejected a policy, being pushed by the Australian Greens, of limiting the processing period to 30 days or the 90 days recommended by a Senate committee.
He said it would be very difficult to meet those deadlines in all cases, especially those involving people who arrived in Australia without documentation to support their asylum claims.
"It can take time to sort those issues through," Mr Bowen told ABC radio.
"I'm not going to sit here and pretend to you that in every case that will be possible because there are some cases that it simply would not be in the public interest to do that."
Mr Bowen said he would not ignore ASIO advice that it would be against the national interest to release particular people into the community.
He also rejected suggestions the Tamil man's situation had been complicated by a confluence of events involving the commonwealth ombudsman.
A report on the man's case arrived on the ombudsman's desk the same day Allan Asher resigned from that role.
"I don't think that's right at all," Mr Bowen said.
The immigration department routinely referred cases where people had been in detention for more than two years to the ombudsman.
* Readers seeking support and information about suicide prevention can contact Lifeline on 13 11 14 or Multicultural Mental Health Australia on www.mmha.org.au
