SYDNEY The death of 28 asylum seekers, who drowned when their boat was smashed on rocks on Christmas Island, has renewed pressure on Prime Minister Julia Gillard to soften Australia's asylum policy and may strain her one-seat minority government.
Gillard on Thursday conceded that one of Australia's most divisive political issues, which has determined past elections, was once again on the agenda.
But she sought to take the sting out of the renewed debate on asylum seekers, which in the past has been tinged with xenophobia, and appease her government's key supporters.
"Inevitably there will be public debate relating to asylum seekers and refugees. I am in favor of frank and open national conversations about policy," said Gillard, who cut short her Christmas holidays to deal with the tragedy.
Gillard took the unusual step of announcing that a bi-partisan political group would review all reports into the tragedy and advise on any changes to the asylum policy.
"I believe this bi-partisan reporting mechanism will assist the whole parliament and the Australian people to understand the facts," Gillard told a news conference.
Independent MP Rob Oakeshott, whose support won Gillard's Labor a second term in August, earlier demanded she explain why the Indonesian timber boat, carrying Iraqis, was not intercepted on Wednesday, like other asylum boats, in open seas.
Australia's Greens party, another key member of Gillard's minority government, has also renewed calls for a "more humane" approach to boatpeople and a regional asylum processing center.
But both Oakeshott and the Greens, who favor a softer line on asylum policy, are not expected to risk the government's future, although Gillard will need to balance their concerns with those of Labor hardliners.
"Rumors and allegations are shooting through communities...with the worst being that government authorities allowed this to happen," Oakeshott said in a statement.
"These Rumors must be addressed head on. Leadership must make a detailed and comprehensive statement of exactly what happened and why it happened."
Gillard said bad weather meant the ill-fated boat was not detected until it was in trouble, but added all the facts would not be clear until police and custom and border protection agencies held inquiries. "Once the facts are know then we can have a policy debate," she said.
The issue of how to handle boatpeople arrivals, while small in number compared with those crossing the Mediterranean to Europe, is an emotive subject in Australia and was a major issue at August national elections.
"Labor is really struggling on border security issues. The government raised expectations that they would stop the boat arrivals. But their policy is a complete mess," said political analyst Nick Economou, from Melbourne's Monash University.
Gillard has previously proposed a regional asylum processing center, possibly in East Timor, to curb boatpeople arrivals. More than 130 boats arrived in 2010.
"Her task is purely and simply to try and ensure that yesterday's deaths do not revive the issue of boatpeople in a way that seriously damages the standing of her government," said www.crikey.com.au political commentator Richard Farmer.
In 2001, then Prime Minister John Howard led his conservative government to victory at elections solely on the policy of tougher border protection and stopping boatpeople.
DEATH TOLL MAY RISE
The death toll from Wednesday's tragedy could rise to more than 50, say rescue officials, with only 42 people rescued from a possible 100 passengers. Police said most of the passengers on the timber Indonesian boat were Iraqis.
"We have to prepare ourselves for the likelihood that more bodies will be found," said Gillard.
Australia's worst boatpeople tragedy was in 2001 when 353 asylum seekers drowned when their Indonesian timber boat sank in the Indian Ocean. "We condemn the trade in people smuggling. It is an evil trade," said Gillard.
Australia intercepts boatpeople in the Indian Ocean, detaining them on its remote Christmas Island for processing, which prevents asylum seekers gaining greater legal rights by landing on the Australian mainland.
"Unless the government changes its policies and adopts a welcome refugee policy, there will be more tragedies," said Australia's Refugee Action Coalition spokesman Ian Rintoul.
Immigration Minister Chris Bowen, just returned from talks with the United Nations and Malaysia over a possible East Timor processing center, said the latest tragedy would not immediately change border security policy.
"We need to break the people-smuggling business model. To do so we need international cooperation and that's what we're working very hard on to do," he said.
(Additional reporting by James Grubel in Canberra, editing by Miral Fahmy)