New migrants would be forced to settle in regional areas for up to five years under a federal plan to ease congestion in Melbourne and Sydney.
A decision on the time period for mandatory settlement was due to go to the Turnbull cabinet last week, but the leadership spill put that discussion on hold.
The proposal has yet to be put to Scott Morrison's new cabinet, The Australian reports.
Geelong-based opposition MP Richard Marles said there was definitely merit in encouraging migrants to settle in regional towns.
"I live in regional Australia and for us we want to see a greater population, and that's a very different perspective from people who live in western Sydney, for example," Mr Marles told Sky News.
However, he is not convinced forcing migrants into regional centres will work.
"I'm not actually sure there is the power to put that in place, to actually mandate they do live there," Mr Marles said.
"I think there are other ways in which we can creatively explore policy which sees those who are coming to Australia moving to regional Australia."
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