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The 21 people onboard were processed at sea, according to the Daily Telegraph, and were "not considered to be owed protection" so were returned to Vietnam.

The prime minister has used the incident to reignite the scare campaign over asylum-seeker boats, saying Labor won't have the "will power" to follow through on turning back boats.

"The Labor party has announced they are going to abolish temporary protection visas," Turnbull said.

"This will mean that the 30,000 asylum seekers who came by boat under the Labor government, who are in Australia, will get permanent residence. This will send an absolutely unequivocal signal to the people smugglers that under a Labor government, anyone who manages to get to Australia on a boat will be able to stay here permanently."