Asylum seekers who attempt to reach Australia by boat should be deported to detention centres in Malaysia, Papua New Guinea and the tiny Pacific atoll of Nauru, a report to Parliament recommended today.
The report aims to curb the flow of future boat arrivals and was drawn up by an expert panel headed by former Australian Defence Force Chief Angus Houston. It combines policy solutions proposed by the major political parties, who remain bitterly divided on the issue.
Human rights group Amnesty International described the report's recommendations as a major setback for Australian refugee policy.
Prime Minister Julia Gillard commissioned the report six weeks ago after two people-smuggling boats capsized between Indonesia and Australia within a week with more than 90 asylum seekers believed drowned.
Mr Houston said he was "dismayed" by a newspaper report today, unconfirmed by authorities, that another 67 asylum seekers may be missing at sea.
In commissioning the report, Ms Gillard hoped to break the political deadlock on asylum seekers.
Parliament resumes tomorrow for the first time since the Senate rejected legislation in June that would have allowed the government to deport asylum seekers to offshore detention centres in a bid to deter others from making the same hazardous journey by rickety fishing boats from Indonesian or Malaysian ports.
More than 7,000 asylum seekers - many from war-torn countries including Afghanistan, Iraq and Sri Lanka - have reached the Australian Indian Ocean territory of Christmas Island in more than 100 boats so far this year.
The ruling centre-left Labour Party want to send asylum seekers to Malaysia as part of a swap deal in which Australia would resettle bona fide refugees from Kuala Lumpur registered with the United Nations.
The conservative opposition argues that asylum seekers' rights would not be respected by Malaysia because it has not signed the UN Refugee Convention. The opposition argues that detention centres should be reopened in the poor Pacific countries of Nauru and Papua New Guinea where a former Australian conservative government established them a decade ago.
The report recommends the Nauru and Papua New Guinea centres be quickly re-established to process asylum seekers' refugee claims. It also said that the Malaysian deal needed more work to address human rights concerns, "rather than being discarded or neglected."
Opposition immigration spokesman Scott Morrison welcomed the report as an endorsement of his party's policies.
The report also recommends that Australia encourage more people to seek asylum through legitimate channels by immediately increasing the nation's refugee quota from 13,750 to 20,000 and to 27,000 within five years.
"We recommend a policy approach that is hard-headed, but not hard-hearted. That is realistic, not idealistic. That is driven by a sense of humanity as well as fairness," Mr Houston told reporters.
The Australian Customs and Border Protection service said in a statement that it was aware of reports that a boat carrying 67 might have gone missing between Indonesia and Australia.
"These claims are being investigated," the service said in a statement.
The Daily Telegraph newspaper reported that the group, including 28 Palestinians, told their families that they were sailing for Christmas Island in late June and had not been heard of since.