The government will spend $2.1 million on the advertising campaign in the next week. Home Affairs Minister Jason Clare said the government would pay up to $200,000 for information that led to the arrest of people smugglers. He said that, increasingly, people smuggling was being organised - and money changing hands - in Australia, rather than solely in Indonesia. ''These people are peddling in misery and death so we are putting a bounty on their heads,'' Mr Clare said. ''We need to shut this market down. We have taken the product they are selling off the shelves. We also need to lock these people up.'' Would-be asylum seekers in Sri Lanka and Indonesia say Australia's new policy of sending all boat people to PNG for processing and resettlement probably would deter them from coming to Australia. ''I have read about this announcement from Australia,'' said Father Sarath Iddamalgoda, a Catholic priest in Negombo, on Sri Lanka's west coast, who said he had seen thousands of people, both Tamil and Sinhalese, board boats for Australia. ''It will not stop people from leaving Sri Lanka, but now they might try for other countries.'' When the news of Mr Rudd's PNG plan reached asylum seekers waiting in Indonesia ''it was like a bomb going off'', according to one Iranian man. Bizhan, 33, who survived a terrifying boat sinking just a few weeks ago in an attempt to get to Australia, said people were shocked and confused. But he said it would stop him getting on another boat. He said he would now wait for settlement by the UN refugee program.

Asylum seekers arrive in Australian waters. Now, they will be turned away. Credit:Sharon Tisdale The Labor Party's decision to run full-page advertisements in newspapers - warning people that they ''won't be settled in Australia'' if they come by boat without a visa - drew criticism on Saturday. Independent senator Nick Xenophon said he would make a formal complaint about the government's advertising for the policy, describing it as a blatantly political campaign paid for by the taxpayer. The government will spend $2.1 million on the advertising campaign in the next week. The Greens said Labor should pay for the campaign. ''This advertising campaign is designed only to help Kevin Rudd's election chances as he rushes to the polls, and shouldn't be bankrolled by the Australian taxpayer,'' Greens immigration spokeswoman Senator Sarah Hanson-Young said. She called the deal ''a rush to cruelty as Kevin Rudd rushes to the polls''. ''Warm-hearted Australians and Labor voters will be devastatingly disappointed, because this deal is about cruelty to refugees, not about caring for them,'' she said.

On Saturday, Immigration Minister Tony Burke said there was no conflict between a humanitarian approach and pragmatism. ''I want there to be fewer people drowning on the high seas, and I make absolutely no apology for that,'' he said. PNG's cabinet was told on Friday that the Manus Island centre could hold up to 3000 asylum seekers, although Mr Rudd stressed there was no cap on the number that could be covered by the deal. Opposition immigration spokesman Scott Morrison welcomed the move, but said the government's proposal was a ''blank cheque'' solution that was light on details. ''All of the details, and all of the cost is still to be worked out by officials,'' he said. ''These sorts of ramp-ups could take two years. And what do they do in the meantime?'' He pointed out that asylum seekers younger than seven cannot be sent to PNG's Manus Island processing centre, as they were too young to take anti-malaria medication. AFP assistant commissioner Ramzi Jabbour said police believed some people-smuggling syndicates were operating from Australia, with tentacles in Indonesia and Malaysia.

''You need to look at this as a serious criminal syndicate, an organised crime syndicate,'' he said. ''So they have tentacles in Australia, in the transit country, and in the origin country or the source country.'' Mr Jabbour said people smuggling was often conducted by refugees who had settled in Australia and wanted to bring their families to join them. But police also faced organised groups trafficking asylum seekers to Australia. Opposition Leader Tony Abbott said Australia should not rely on PNG to come to its aid. In a speech to the party faithful at the Queensland LNP state convention, he said he was grateful for the nation's help. ''But, you know, the Australian people know, I know, the only solution to Australian problems is found here in Australia,'' he said. ''And I will never subcontract out to other countries the solution of problems in this country.'' Queensland Premier Campbell Newman said that given that people could ''row across in a tinnie or a canoe'' from PNG into Queensland, the agreement with PNG would see a new wave of immigration through the Torres Strait.

''What Kevin Rudd has done is take Australia's problem and make it Queensland's problem,'' he said. ''The Torres Strait is a porous border right now, porous in that many, many people come across the strait from PNG in Queensland each year. ''It's only four kilometres from PNG on to the soil of Queensland. What Kevin Rudd is doing is creating a launching pad for a wave of additional ongoing immigration from PNG into Queensland, either legal or illegal.'' The Anglican Archbishop of Adelaide, Jeffrey Driver, said the federal policy was ''an abrogation of Australia's moral responsibility to vulnerable people'', and ''politically driven, based on popular myth, and inhumane''. Loading ''The federal government's policy seeks to address the problem of people smugglers by abusing their victims.''

With AAP, Ben Doherty, Cameron Atfield, Natalie O'Brien