PLAYING NOW: Latika Bourke and Neil Mitchell discuss the asylum seeker policies of both the government and opposition.

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REPORT: The federal government has announced that it is in negotiations to set up a regional processing centre for asylum seekers in East Timor.

Prime Minister Julia Gillard said today she had spoken with East Timorese President Jose Ramos-Horta, who welcomed the proposal.

She said the proposal was not a return to the Pacific Solution, but would ensure people smugglers would ‘‘have no product to sell''.

‘‘It would be to ensure that arriving by boat does not give anybody an advantage in the likelihood that they would end up settling in Australia or other countries in the region,’’ she said.

Ms Gillard said the move would ensure everyone was subject to a consistent fair assessment process.

‘‘It would be to ensure that arriving by boat does not give anybody an advantage in the likelihood that they would end up settling in Australia or other countries in the region,’’ she said.

Dr Ramos-Horta welcomed the conversation about the possibility of establishing a centre in East Timor.

‘‘And I look forward to the consultation and dialogue on developing this initiative into a proposal,’’ she said.

‘‘In recent days I have discussed with President Ramos-Horta of East Timor the possibility of establishing a regional processing centre for the purpose of receiving and processing irregular entrants to the region,’’ Ms Gillard said.

‘‘The purpose would be to ensure that people smugglers have no product to sell.’’

Ms Gillard said she had also discussed the matter with the United Nations High Commissioner for Refugees (UNHCR).

Gillard in talks with New Zealand PM

Ms Gillard said she had also spoken to New Zealand Prime Minister John Key about the possibiliy of a regional processing centre for asylum seekers.

‘‘John said to me that he would be open to considering this initiative constructively,’’ she said.

‘‘East Timor and New Zealand are vital countries in this initiative, as they are already signatories to the refugee convention.

‘‘And New Zealand, like Australia, is a key resettlement country.’’

Ban on Sri Lankan asylum claims lifted

Ms Gillard said the government had decided to immediately lift the ban on the handling of Sri Lankan asylum claims, a ban due to be lifted on Thursday.

‘‘The government has decided to lift immediately the suspension of processing claims for Sri Lankans.’’

A new framework for ‘‘orderly migration’’ in the region would take time, Ms Gillard said.

‘‘I ask for the patience and support of the Australian people as we work with the countries of our region on this shared challenge,’’ she said.

There had been a promising start to a new regional solution.

‘‘A regional solution with the participation of the UNHCR could prevent the piling up of unauthorised arrivals in detention in Australia,’’ she said.

‘‘This is a solution I will pursue relentlessly.’’

Opposition's turn back the boats slogan 'shallow'

Ms Gillard called for a national debate on the asylum seeker issue, saying the community had been polarised by inflammatory language from the Opposition.

She said the government's policy goal was clear.

"It is to wreck the people-smuggling trade by removing the incentive for boats to leave their ports of origin in the first place," Ms Gillard said.

The Prime Minister said Labor's policy would seek to remove the "profitability of the trade and the danger of the voyage".

The announcement came after Opposition Leader Tony Abbott earlier in the day confirmed the coalition had ratcheted up its border protection policy.

Mr Abbott said asylum seekers who deliberately discarded their passports before arriving in Australia would be turned away under a coalition government.

It is one of two new prongs in the coalition's border protection regime.

The coalition would also seek to bring more "objectivity" to the refugee approval process by taking decision making powers away from immigration officers on Christmas Island.

Instead, the Immigration Minister would be given greater powers of intervention.

The coalition also plans to reintroduce the Pacific Solution, restore temporary protection visas, and would turn asylum seeker boats around regardless of whether or not they are in international waters or Australian territory.

Burnside's redneck claims 'wrong'

Ms Gillard said Julian Burnside, QC, was right on the point it would take 20 years to fill the MCG with illegal arrivals.

But the prominent QC was wrong to label people with concerns about unauthorised arrivals ‘‘rednecks’’, she said.

‘‘Of course there are racists in every country but expressing a desire for a clear and firm policy when you are faced with a difficult problem does not make you a racist,’’ Ms Gillard said.

The debate on asylum seeker policy had been polarised by extreme emotionally charged claims and counter claims by a fundamental disrespect the prime minister said she would reject.

‘‘Even worse is the deliberate use of inflammatory politics presented as policy,’’ Ms Gillard said pointing to opposition claims they would turn boats back.

Mr Abbott’s ‘turn the boats back’ slogan was shallow and ‘‘nonsense’’, Ms Gillard said. The Opposition Leader’s claim the Howard government actively turned boats back was wrong, she said.

Just seven boats were turned back by the Howard government and the last was turned back in November 2003, Ms Gillard said.

Only seven boats were turned back under the Howard government, and none were turned back after 2003, because of the realities of the situation, Ms Gillard said.

‘‘To avoid being turned around, boats are sabotaged, raising safety of life at sea concerns for Australian customs and border protection and defence personnel as well as the asylum seekers on board,’’ she said.

‘‘The second practical reality is that there is nowhere to turn the boats back to.

‘‘Indonesia has made it clear that it will not accept such returned boats.’’

Ms Gillard says the division on the issue is creating an impasse.

‘‘If you are hard headed you’re dismissed as hard-hearted, if you are open-hearted you’re marginalised as supporting open borders,’’ she said.

‘‘I say to those engaged in this type of rhetoric, stop selling our national character short, we are better than this, we are much better than this.’’

- AAP via The Age online