Malcolm Turnbull says New Zealand's offer to resettle 150 detainees in off-shore detention on Manus Island has boosted demand for people smugglers.
The prime minister said people smugglers have used the offer - which Australia has rejected - to give false hope to asylum seekers.
Border Force authorities recently intercepted a number of boats who planned to go to New Zealand.
"There are a number of boats, people-smuggling boats, that have sought to come to Australia - that have been intercepted by our Operation Sovereign Borders which stated they were planning to go to New Zealand. They market whatever scrap of information that they can," he said.
Mr Turnbull also claimed the federal opposition's rejection of the government's resettlement policy had worsened the situation.
Opposition leader Bill Shorten hit back at that accusation and launched his own attack on Home Affairs Minister Peter Dutton.
Supplied image obtained Saturday, November 18, 2017, of asylum seekers and refugees protesting at the Manus Island immigration detention centre Source: Refugee Action Coalition
"If you follow Mr Dutton's logic, the only way to deter people from people smuggling is keeping them indefinitely for the rest of their lives in settlements on Manus and Nauru," Mr Shorten said.
"I don't even think he believes that ... We do support stopping the people smugglers, we don't support bringing people who come by boat and people smugglers to Australia.
"But that doesn’t mean we have to keep them indefinitely."
The comments come as flights carrying refugees from Manus Island left on Tuesday as part of a deal with the United States.
The Sydney-based Refugee Action Coalition said 40 men flew out from Papua New Guinea's capital Port Moresby under a deal struck between Australia and former US president Barack Obama. It has been bitterly criticised by his successor, Donald Trump.
Mr Trump attacked it after taking office as a "dumb deal".
The refugees from camps on Manus Island flew to Manila from where they will fly on to the US in different groups in the coming weeks before being resettled across the country, the advocacy group said in a statement.
"It was a bittersweet moment for the refugees, who on the one hand, are happy to be gaining the freedom that Australia denied them more than four years ago, but on the other they remain extremely concerned for those that are being left behind," it said.
The group released photos showing the refugees lining up before dawn to get on buses for the airport, then waiting at the gate to board their flight to Manila.
Another 18 men were due to leave Port Moresby in the coming weeks, it said.
A further 54 detainees from Nauru and Papua New Guinea were resettled under the same deal in 2017.
Australian Human Rights lawyer Amy Frew said those leaving on planes from Manus had found hope again after spending years in detention.
Australian Prime Minister Malcolm Turnbull talks as New Zealand Prime Minister Jacinda Ardern listens Source: AAP
"I can't imagine the way they would feel, flying to safety after four-and-a-half years. But unfortunately for the 2000 people that remain behind, there's no schedule, there's no plan," Ms Frew said.
"There are people just waiting desperately, just losing hope, hope that they will be the lucky ones on the next plane."
Ms Frew says more detainees may be leaving Nauru next month.
She felt Australia's rejection of New Zealand's resettlement offer risked rebuke from the United Nations.
"The New Zealand government has made this repeated offer of 150 people - and that's 150 people that could be living in safety now - that are still living in what the UNHCR (United Nations High Commissioner for Refugees) and the UN (United Nations) has a number of times said are desperate and dangerous conditions," she said.
Australian and US immigration authorities did not immediately respond to a request for comment on the refugees' movements.
The Australian government has strongly rejected calls to move the refugees to Australia and instead has tried to resettle them in third countries.
The Refugee Action Coalition said a further 130 people on Nauru have been accepted by the US and are expected to depart next month.
Mr Turnbull has said he will only consider the New Zealand offer once the US agreement had been fulfilled.
- With AFP
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