Govt's $200,000 bounty on people smugglers

The federal government will pay up to $200,000 for information leading to the arrest of people smugglers, Home Affairs Minister Jason Clare says.

Authorities have abandoned the search and rescue for an asylum seeker boat which went missing.

"These people are peddling in misery and death (so) we are putting a bounty on their heads," the minister has told Fairfax media.

"We need to shut this market down. We have taken the product they are selling off the shelves; we also need to lock these people up."

The bounty initiative comes on the back of Prime Minister Kevin Rudd's announcement that all asylum seekers who come by boat will now be transferred to Papua New Guinea, where they will be processed and if found to be refugees settled there.