Prime Minister Tony Abbott has come closer than ever to admitting his government paid people smugglers to take boats back to Indonesia.

Mr Abbott has steadfastly refused to comment on the allegations that first surfaced in Fairfax Media reports a fortnight ago, citing "operational" concerns.

But in a speech to the NSW Liberal Party faithful in Sydney on Saturday, Mr Abbott attacked Opposition Leader Bill Shorten's handling of the allegations – and in the process, came perilously close to admitting they were true.

"On Monday, Mr Shorten attacked us for allegedly doing something to turn around boats, which it turned out that he had done exactly the same," Mr Abbott said.