The Christmas Island detention centre will be re-opened to deal with any refugee boats arriving in Australia.
Scott Morrison made the announcement after the government failed to block a law allowing asylum seekers held offshore to seek medical treatment in Australia.
The government lost a historic vote in parliament last night - the first time a sitting government has lost a vote on its own bill for the first time in 78 years.
The refugee transfer laws were passed in the House of Representatives by 75 votes to 74 after Labor was joined by the Greens and all independents except Bob Katter.
Home Affairs Minister Peter Dutton warned the law would leave Australia's borders open to people smugglers.
Asylum seeker laws passed in a historic defeat for the federal government on Tuesday have left Australia's borders open to people smugglers, Home Affairs minister Peter Dutton (pictured) has warned
In a fiery ten-minute exchange with Leigh Sales on the ABC's 7.30 program on Tuesday night, Mr Dutton described the unravelling of his government's border protection policies as a disaster for Australia.
He also claimed Opposition leader Bill Shorten had failed his test in leading the country on border protection.
While Mr Dutton said his government will abide by the legislation passed, he expressed concerns for the consequences of the deal struck between Labor, the Greens and independents.
'This puts Australia back on the map for people smugglers and Bill Shorten has that on his shoulders,' he said.
'I think Mr Shorten doesn't yet understand the full consequence of his decision tonight, but I think the Australian public do.'
'This puts Australia back on the map for people smugglers and Bill Shorten has that on his shoulders,' Dutton said
'I believe we will see boats. I think there is no question that people smugglers will be hearing very clearly that the policy in Australia has changed and I think we need to be very cognisant of that.
He also claimed the new bill would allow people being held at Manus or Nauru, who have been charged with serious crimes such as murder and child sex offences, to come to Australia. '
Mr Shorten took to Twitter on Tuesday night to say the bill only applies to people who are already on Manus and Nauru.
'This means the people smugglers don't have a product to sell and can never again resume their trade in human misery,' he tweeted.
'The Australian people understand our nation can be strong on borders and still treat people humanely. We can preserve our national security and still look after people to whom we owe a duty of care. This legislation gets that balance right.'
Opposition leader Bill Shorten and Prime Minister Scott Morrison have differing views over asylum seekers
Mr Dutton refused to answer Sales' questions on the number of asylum seekers on Nauru and Manus charged with serious offences, adding he would only release those details if appropriate.
But later in the evening details concerning four men held offshore who are charged with
