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Updated at 8:15 pm on 11 February 2013
Prime Minister John Key says it is possible New Zealand will use Australia's offshore detention centres to process mass arrivals of asylum-seekers.
He says New Zealand can't rule out the very real possibility that such people will eventually make it here in significant numbers.
Just before Christmas, he says, Australian intelligence agencies believed a boat was heading to New Zealand from Indonesia.
Mr Key says he understands the boat was either prevented from leaving, or intercepted.
He says the Government is spending tens of millions of dollars upgrading the Mangere Refugee Centre, but other options have to be considered.
Asylum-seekers who have already reached Australia are in the process of being transferred to the Australian-run Manus Island detention centre in Papua New Guinea.
The United Nations High Commissioner for Refugees recently labelled the centre unlawful, and criticised the conditions as inhumane. A similar centre in Nauru reopened in August, and there are centres in mainland Australia too.
Mr Key says there have already been discussions between New Zealand and Australia about sending people to offshore centres if boatloads of illegal arrivals start to turn up in New Zealand waters.
He says he's been assured by Australian prime minister Julia Gillard that conditions at the centres meet international standards.
Earlier on Monday, former immigration minister Aussie Malcolm said New Zealand's international standing would suffer now that it has agreed to take some of Australia's asylum-seekers.
New Zealand annually takes a quota of 750 refugees, as agreed with the United Nations. From 2014, 150 of those places each year will be taken by boat people from Australian detention centres.
Mr Malcom told Morning Report this reduces New Zealand's standing as an international citizen and its ability to take leadership positions on the issue.
He said the deal essentially supports Australia's position and there couldn't be a worse outcome for the refugees.
Mr Malcom said New Zealand should be working with Malaysia, Thailand and Indonesia to sort out the problems that make their citizens want to leave.
Also earlier, before Mr Key made his comments, the Refugee Council said there had been speculation the agreement involves an unannounced tradeoff.
Spokesperson Gary Poole told Morning Report that refugee groups in Australia believe there has possibly been an agreement that if a boat of asylum-seekers ever arrived in New Zealand, it would be dealt with by the Australian government in one of its detention centres.
He said if that is true, it would be a very serious concern and a breach of the UN agreement.
Race Relations Commissioner Joris de Bres says it seems unfair for New Zealand to be taking asylum-seekers from Australia at the cost of other refugees wanting to come to this country.
Mr de Bres says he's very pleased New Zealand is helping a grave humanitarian situation but it would have been fantastic to simply take the extra people on top of the annual quota.
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