Asylum seeker bill defeated in Senate

AFTER more than 13 hours of passionate debate across two chambers of parliament, Australia's asylum seeker policy impasse remained on Thursday night after Independent Rob Oakeshott's bill to allow offshore processing in Malaysia and Nauru was defeated in the Senate.

Debate began in the Senate before 10am on Thursday, with the Coalition and Greens combining to defeat the bill 39-29 shortly after 5pm, albeit for very different reasons.

Prime Minister Julia Gillard fronted the media in Canberra after the vote to announce the government's next step in attempting to break the stalemate.

She will establish an expert group to compile a report on the "best way forward for our nation in dealing with asylum-seeker issues".

Ms Gillard has invited retired defence force chief Angus Houston to chair the group, which will begin work immediately with the expectation its report will be finalised before parliament resumes in six weeks.

Considering the complexities of the asylum-seeker issue, she conceded she was setting the expert panel a "formidable task".

Paris Aristotle, who for more than 20 years has held senior positions on government advisory bodies in the refugee resettlement and humanitarian fields, has been invited to join the panel.

A third panel member with foreign policy expertise will be announced soon.

The Prime Minister said that in compiling its report the expert panel would enjoy unfettered access to government departments and relevant material.

The Opposition and Greens also will be asked to nominate representatives who will sit on a reference group, which the expert panel will be free to consult as they attempt to better understand the perspectives of parliamentarians.

If Opposition Leader Tony Abbott refuses to participate in the cross-party process, Ms Gillard said she would invite individual Coalition MPs to nominate.

Ms Gillard was at pains to stress the independence of the expert panel which, she said, was free to arrive at any conclusions it saw fit.

She said that despite the perception, there had been a lost of "interesting goodwill" in the parliament.

But she accused Mr Abbott of voting "against stopping the boats".

Earlier, Mr Abbott spoke to reporters as senators voted.

He said "pride and stubbornness" had stopped Prime Minister Julia Gillard from reaching a compromise.

The Opposition said it was willing to support the bill with an amendment that would have prevented Australia from sending asylum-seekers to countries not signed up the UN Refugee Convention, including Malaysia.

"The Australian public are entitled to feel badly let down by the government and the system on occasions like this," Mr Abbott said.

Mr Abbott again said the Coalition would never support the government's Malaysian people swap deal.

He said he had no problem with Malaysia, but that "their standards are not our standards".

The Greens, who praised the establishment of the expert panel but are opposed to any form of offshore processing, failed in their bid to have amendments attached to the bill, including Australian increasing its humanitarian intake and UNHCR funding to speed up the assessment process.

In a bid to win support from the Greens Mr Abbott had offered, if elected prime minister at the next election, to increase Australia's annual humanitarian intake from 13,750 to 20,000.

Despite the Greens welcoming the commitment, it wasn't enough to secure their vote in the lower house.

The sinking of a second boat north of Christmas Island in less than a week was the catalyst for the marathon debate in Canberra.

Four people are thought to have died in the latest incident, while up to 90 perished in last week's tragedy.

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