A further two boats carrying 108 people have been intercepted in Australian waters, bringing the total number of illegal boat arrivals for June to 1781 people.

That is a record number of arrivals in a single month, says coalition immigration spokesman Scott Morrison.

One boat carrying 41 people was picked up northeast of Ashmore Islands in the Timor Sea on Friday evening, and a second carrying 67 passengers was intercepted at Cocos (Keeling) Islands that night.

Passengers from both boats will be processed on Christmas Island.


Parliament failed to agree on a compromise bill on asylum policy this week, despite about 100 people dying in twin boat disasters in the past 10 days.

Prime Minister Julia Gillard on Thursday announced the creation of an independent expert group to examine asylum policy and deliver a report on a way forward by the time Parliament resumes on August 14.

Morrison repeated the opposition's calls for Nauru to be reopened, saying the Government's inaction was encouraging the illegal boats.

Former foreign affairs minister Alexander Downer said the Rudd and Gillard governments should be condemned for opening Australia to people smugglers and Indonesia should not be allowed to get away with leaving the problem to Australia.

Mining tycoon Clive Palmer said a cheaper and safer solution would be to allow asylum seekers to buy their own plane tickets at one-tenth the cost of boat travel.

Australian officials could process the legitimate asylum seekers at the airport and send the illegitimate arrivals back on the next flight, he said.

"We can eliminate the people smugglers.

"We can eliminate the problem. We can eliminate the drownings. We can treat people as human beings," he told journalists at the Liberal Party conference.