Former prime minister Kevin Rudd has admitted the hard-line asylum seeker policy Labor implemented in mid-2013 was "not a perfect answer" but says his government was facing a practical, moral and political dilemma.
The now retired Mr Rudd delivered a lecture titled "On Politics" at Oxford University on Saturday night.
Mr Rudd urged 300 students who he said would become future world leaders to meet five challenges.
He asked them to preserve peace, fight for liberty, work for inclusive capitalism, face the rise of China and take seriously the "gargantuan challenge" of climate change.
A student subsequently asked if his policy of turning away asylum seekers was consistent with his advice to always pursue peace and liberty.
As prime minister in July 2013, Mr Rudd unveiled his so-called PNG solution.
Under the policy, continued by Tony Abbott's government, Australia no longer accepts any asylum seekers arriving by boat and instead sends them to PNG for processing and possible resettlement.
Mr Rudd acknowledged the policy was controversial but said it was implemented in the context of 12 million refugees languishing in camps around the world, with another 40 million people internally displaced.
He insisted Australia was the third most generous country when it came to resettling UNHCR refugees behind the United States and Canada.
Mr Rudd said "a large slice" of people arriving by boat weren't genuine asylum seekers.
"Where it got to by the end of 2013 was the number of folks coming by boat was overwhelming the whole (Australian) refugee intake," he said at the prestigious Oxford Union.
"The lesson that sent out to people smugglers was `You come by boat, we'll get you there quickly (but) if you stay in a camp somewhere around the world, in some hell-hole, you're never going to get anywhere'."
Mr Rudd said Labor was facing a "practical, moral and political dilemma".
"It's not a perfect answer," he admitted of the ALP policy, before adding all the facts had to be considered before judging if it was right or wrong.
Iranian man Reza Berati, 23, died at the Manus Island detention centre in mid-February following a riot.
