Shortly after the bill was voted down, Prime Minister Julia Gillard announced former Defence chief Angus Houston would lead an expert group to devise the best way forward for dealing with the asylum seeker issue.
Air Chief Marshal Houston is to report back to the Government before Parliament resumes on August 14.
The policy debate was prompted yesterday by the deaths of more asylum seekers on their way to Christmas Island.
The key points:
- Senate votes down the amended Oakeshott bill
- PM appoints Angus Houston to lead expert group to devise best way forward for asylum seeker policy
- Search called off for survivors of Wednesday's boat sinking
- 134 on the boat, 130 rescued (113 men, 3 women, 12 boys, 2 girls), 1 dead, 3 missing
Here's how the day's events unfolded:
6:35pm: Greens leader Christine Milne has backed the Prime Minister's proposal for a multi-party committee to work with Angus Houston's expert group.
"It is a good way to get that expertise and and understanding into the political process so we do welcome that."
6:19pm: Judith Sloan - Honorary Professorial Fellow at the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne - is on The Drum tonight.
She says the appointment of Angus Houston to lead the expert panel is "a joke".
"Is this what it's come to, thanks to the minority government?
"The idea that Angus Houston is all of a sudden an expert in asylum seeker policy and the like. I mean, heavens above, he was a soldier. You can just imagine them around the Cabinet table, 'Any ideas? Angus Houston, Angus Houston? Any other names. Let's go to Angus Houston.'
And she says Tony Abbott and the Coalition should not have to compromise.
"This is the Government's own mess. I can smell the hypocrisy back here in Melbourne emanating from Canberra.
"They were the ones who dismantled offshore processing. Here we had Senator Evans, former Minister of immigration telling us that this was his finest achievement, to shut down Nauru and to get rid of the temporary protection visas. Well, seriously, I don't see why Tony Abbott should lift a finger.
"I mean, another element of hypocrisy is that Julia Gillard made it absolutely clear that she would only enter into offshore processing arrangements with countries that had signed the the UN Refugee Convention, and then she laughably named East Timor."
6:01pm: The Prime Minister says she wants Angus Houston to report back before the August session of Parliament.
5:47pm: The Prime Minister and Immigration Minister are holding a press conference. Julia Gillard announces former Defence chief Angus Houston will lead an expert group to work in the coming weeks on the best way forward for dealing with asylum seeker issues.
"The expert group that Mr Angus Houston will lead will have serving in its numbers Paris Aristotle. That is a name well known to migrant refugee communities. He is a refugee himself and a survivor of torture and worked over a long period of time with this Government and with the former Howard government on detention centre issues, including being used as a lead negotiator in some of our most difficult issues within detention centres.
"I want to be very clear about the role of this expert group. This expert group will receive the facts from Government and beyond. They will be able at their option to receive briefings wherever they want to get those briefings from. They will be able to assemble all of the material to help them form their views. They will be able to consult as they see fit.
"I will invite the Leader of the Opposition, the leader of the Australian Greens and the Independents to nominate parliamentary representatives to a reference group that will be able to consult with by the expert group.
"Should the Leader of the Opposition decline to formally nominate members of the Opposition to participate in this reference group, then I will invite across the Liberal and National parties individual members to nominate themselves to participate, if they choose to do so.
"I do not believe it will be possible for any person in this Parliament to utter one criticism of a person like Angus Houston."
Chris Bowen says the Opposition has rejected its own policy of using Nauru for offshore processing:
"We can argue about how effective Nauru may be. We can argue how effective Malaysia may be. I don't think anybody could argue that Malaysia and Nauru implemented together, opened together, would provide a significant deterrent."
"It is not acceptable for the Australian people that our two major political parties, both of whom support offshore processing, have not been able to implement this legislation."
Ms Gillard says Tony Abbott has not moved 1 millimetre at any stage of the discussion.
"Mr Abbott tonight has basically reiterated he is not prepared to move 1mm while people are drowning at sea.
5:38pm: Julia Gillard press conference expected in five minutes.
5:18pm: Rob Oakeshott's bill has been defeated in the Senate.
The bill was defeated 39-29 at the second reading.
5:13pm: Tony Abbott and Scott Morrison are holding a press conference.
Mr Abbott says the Prime Minister should get on the phone to the president of Nauru:
"I very much regret that after 24 hours of impassioned, sincere and at times very moving debate the Parliament has come to this deeply unsatisfactory impasse.
"We have not a solution, but a stalemate.
"The Greens weren't in the end prepared to support our legislation because even with the additional safeguards that we were prepared to offer, even with the very substantial increase in the refugee and humanitarian intake that we were prepared to offer, they in the end weren't prepared to contemplate any offshore processing at all.
"With this deadlock in the Parliament at this time, the Prime Minister goes in to the parliamentary recess without an effective policy. The boats keep coming. The flow just gets bigger every day it seems right now."
5:08pm: Vote resolved in the negative.
5:05pm: The Senate is currently voting on the Greens proposed amendments.
5:01pm: The ABC has obtained new video footage from Christmas Island, which shows several toddlers were among the 130 asylum seekers rescued from a stricken boat yesterday.
4:46pm: The Leader of the Government in the Senate, Chris Evans, says he acknowledges the depth of feeling over the issue but he says parliament is not a place to express feelings, nor is it a place to a express a view we'd prefer the world to be different:
"We all have to focus on the challenge at hand and the challenge at hand is allowing the Government to make a response which allows us to tackle the problem.
"That means passing a bill that allows us to make arrangements with Malaysia to provide a deterrence to people undertaking these risky journeys at the hands of people smugglers who care nothing about the lives that they lose.
"We have to focus on that and if we don't focus on that we will leave the Parliament today having failed the challenge, a challenge that the Australian people expect us to meet. A challenge that I think we all expect us to meet.
"And I pay tribute to those Senators who have sought over the last few days to bring this issue to a more positive conclusion and to overcome the impasse we've had in this Parliament for many months."
4:00pm: Independent Senator Nick Xenophon says he will support Rob Oakeshott's amended bill.
Senator Xenophon, who is in hospital, also says he will back amendments put forward by both the Greens and the Coalition.
He previously supported onshore processing but says he has changed his mind because the facts have changed.
3:36pm: Here's a snapshot of the emotional debate in the Senate.
3:04pm: Labor Senator Trish Crossin has called for a break in the debate.
The Northern Territory Senator says while she is not 100 per cent in favour of the bill as it stands, something must be done to stop the loss of life.
"I'm really saying to the Coalition today have a break sometime this afternoon and reassess this, because if this is not the solution what is?
"Even though I don't give it the full tick, but like Anthony Albanese I'm at least prepared to say we've got to do something."
2:20pm: Tony Crook has issued a statement, saying yesterday was a sad day and was a missed opportunity to resolve this political impasse:
"I have briefly met with a small number of the original cross-party members again today, including Judi Moylan, Rob Oakeshott, Tony Windsor and Steve Georganas.
"This group will continue to push for non-partisan negotiations with the view to developing a long-term policy response that can be supported by all parties.
"We will meet again before leaving Parliament this evening to evaluate what has happened in the Senate today and discuss where we will head from here."
2:03pm: The Greens have put forward amendments to increase Australia's refugee intake and establish a multi-party committee to develop a regional framework for processing refugees.
Labor has accused the Greens of taking a purist approach, but Greens Senator Richard di Natale says the party will not support a bill that reduces protections for refugees.
"I do understand that in politics, as in life, compromise is important, it's essential, but I've always believed real leadership means knowing when not to compromise, because compromise can quickly become betrayal."
1:28pm: The World Today's Emily Bourke spoke to former political adviser and current national president of the Australian Lawyers Alliance, Greg Barns, as well as former ambassador to Indonesia, and a former secretary of the foreign affairs department, Philip Flood, who headed an inquiry into immigration detention procedures in 2001.
"This is an honourable department. It is not a politicised institution and politicians from both sides give great weight to the views of the professional experts in immigration and the security agencies.
"On the point about whether it will work, look Nauru will deter some but it won't deter everybody. For desperate people from Afghanistan or Tamils from Sri Lanka, the prospect of one, two or three years on Nauru before coming to Australia won't deter them."
"In respect of the Greens, I think they have taken rightly a principled position which opposes offshore processing and certainly Australian Lawyers Alliance supports that view and I support that view.
"In relation to the Coalition, it is ironic that they would seek greater human rights protections, given they were the architects of some of the most appalling human rights abuse policies in the last 40 or 50 years."
Listen to the full discussion:
1:20pm: Narda Gilmore wraps up the political manoeuvring on offshore processing over the past 24 hours:
1:09pm: Liberal backbencher Mal Washer says he has extracted a promise from the Government for fresh talks with Indonesia on asylum seekers.
Dr Washer says he has confirmation from the Opposition's foreign affairs spokeswoman that action will be taken to address the reasons why people are getting on boats.
"I have a promise from Julie Bishop and Senator (Bob) Carr on track next week and heading to Indonesia to instigate negotiations to try and achieve that regional settlement."
Listen to Mal Washer's interview with Sabra lane on The World Today
12:25pm: ABC reader Mark Trenorden sent us this photo of the the latest asylum seekers arriving at Christmas Island:
12:05pm: The Opposition's George Brandis has told the Senate members of the Government needs to put their pride aside and admit the policies of the Howard government worked and the policies of the Rudd and Gillard government's have failed.
11:40am: We've just received a photo of the asylum seekers who were rescued yesterday arriving at Christmas Island:
11:30am: Independent Senator Nick Xenophon, who is in hospital with an ear condition, is scathing of the ongoing deadlock:
"This is incredibly frustrating - I think the Australian people are entitled to regard the Federal Parliament, if we cannot resolve this in the next day, as a bunch of petty pissants, because this is something that cries out for a solution."
He has told ABC Local Radio in Melbourne that while is a proponent of onshore processing, a compromise is better than no solution.
"I've previously supported onshore processing, I think that's the right thing to do, that's the moral thing to do."
"That has been my position but you know sometimes purity can be a little bit dangerous. Sometimes, to quote John Maynard Keynes, 'when the facts change I change my mind, what do you do?' And I think that in the circumstances we need to rethink this."
"The fact is the numbers aren't there for onshore processing, it is offshore processing that the major parties want.
"We need to work out the best way to stop loss of life at sea, and if the compromise involves, what some people see as unsavoury, offshore processing, but it also involves an increase in refugee intake, then maybe we have to live with that.
"Right now there is a political deadlock of the sort that the United States is famous for, that Washington is famous for, and I think that is very unhealthy for our democracy."
11:20am: Nationals MP Tony Crook, who was also part of the group of cross-party MPs, says if Mr Oakeshott's bill fails both sides of politics have missed an opportunity to move forward on the issue:
"There were opportunities for all sides of politics to make a compromise on this and I think we're going to miss an opportunity today, because there's a strong likelihood it won't go through the Senate and we'll be in the same position as 24 hours ago."
"That doesn't solve the problem of these people. Our group is taking the politics out of it and finding a long-term solution to protect our borders, protect the people who want to take the risk, and take people that are profiteering from this out of the game."
11:15am: Speaking after Mr Windsor, Liberal MP Judi Moylan says she hopes the cross-party group will be able to pressure both sides of Parliament to come to an agreement on the issue:
"I think that this group has the capacity to grow and to put considerable pressure on the parliament to resolve this and not to continue with this stalemate, which is because people don't want to get out of their corners."
"And I think one of our colleagues at the meeting yesterday said 'it's time we just ate glass, crunched glass over this', and we have to eat humble pie sometimes and have to be prepared to shift our position.
"The Australian public demand and deserve that. They deserve nothing less than for us to get together on this issue.
"There's precedent for it in many other issues the parliament's dealt with, for the Coalition and Opposition to work together."
11:07am: Independent MP Tony Windsor tells reporters while today's legislation may fail, he has met with MPs from both sides looking to seek a long-term solution to the issue:
"I think all of us believe that we need cool heads and cool thoughts to develop up a process and as a group we're most willing to be part of that."
"There may be some other process, but I think the only way this will be solved long-term will be for all the players and the major groups et cetera to come together and design something that they can all actually believe in and have faith in.
10:55am: A breakthrough still looks unlikely - earlier Senator Eric Abetz told the chamber "compromise has never been a substitute for good, sound public policy".
10:44am: Sarah Hanson-Young wipes her tears away as she addresses Parliament:
10:35am: Coalition MP Mal Washer has confirmed he was willing to cross the floor if his vote was needed to pass yesterday's offshore processing legislation through the Lower House.
But Dr Washer has told The World Today he can't instruct his colleagues in the Senate on what they should do:
"At the end of the day I don't want to tell senators how to suck eggs. It's up to them. They saw what I was prepared to do... it's up to the senators to make their own decision."
10:21am: Greens Senator Sarah Hanson-Young is in tears as she tells the story of a teenage asylum seeker's journey to Australia via Malaysia.
Senator Hanson-Young says the proposed legislation undermines efforts to get countries in the region to treat asylum seekers humanely:
"This bill deletes an entire section of our law that says that we agree with the principles of the Refugee Convention, that we helped draft so many years ago."
"This bill says by deleting our commitments in our own law to the Refugee Convention, that we no longer care that people should be treated and protected and given safety as a general principle of law.
"How on earth are we meant to get other countries in our region to stand by the principles of treating each other and the most vulnerable, the most at risk, with humanity, if we say we don't even want that to exist in our own laws."
10:20am: News Online's chief political correspondent Simon Cullen wraps up the morning's events in Canberra.
10:15am: Opposition immigration spokesman Scott Morrison says if Mr Oakeshott's bill fails to pass the Senate then the House of Representatives should pass the Opposition's bill allowing for offshore processing in countries signed up the the UN Refugee Convention:
"The Coalition does have a plan B - this is the bill that is on the notice paper in the House of Representatives today.
"This bill provides for offshore processing in 148 countries around the world.
"I would hope that if the Senate is unable to come to an arrangement today, then the House then can consider this bill as a way forward."
10:00am: Senator Evans says the key to stopping people arriving by boat is by undercutting the people smugglers' business model:
"We have to find way of managing these issues better than they are being managed at the moment and that requires us to find something that undercuts the business model of the people smugglers in Malaysia and Indonesia."
"The Government argues that the Malaysian arrangements will do that. The Opposition argues that Nauru will do that."
He says the Opposition's plan to reopen Nauru will not be effective, but the Government is willing to compromise in order to pass the legislation:
"We don't believe that [reopening Nauru will work] because Nauru was not based on where you send people, it was based on a message that the Howard Government was able to send which was you will never be resettled in Australia - that was the basis on which Nauru worked.
"Unless we're prepared to say to people after being sent to Nauru, 'you'll never be re settled in Australia', it won't work again, it won't make a contribution.
"But this Government has been prepared to compromise to try and get a bill through this parliament that allows us to make a difference on this terrible unfolding tragedy."
9:50am: Senator Chris Evans says that the Government and Opposition need to work together towards a regional solution:
"We all agree that there is a need to break the people smuggling model. We need to stop people embarking on these dangerous journeys and we need to provide a deterrent."
"You have to provide a deterrent to people departing. You cannot just deal with this issue at the country of end point. You have to deal with this issue at the country of source and the country of transit."
9:30am: ABC News24 is carrying live vision of the debate that has just begun in the Senate.
9:06am: Watch Greens Leader Christine Milne confirm her party won't be supporting the bill in the Senate in her interview with ABC News Breakfast:
8:54am: The Oakeshott bill on offshore processing is due to go before the Senate at 9:30am AEST.
8:30am: Opposition frontbencher Joe Hockey has told ABC News Breakfast it is OK to tow asylum seeker boats back to Indonesia because those aboard have contacts there:
8:23am: Home Affairs Minister Jason Clare has told ABC News Breakfast reports of a boat in distress this morning appear to have been a false alarm:
"Yesterday we had reports of another vessel in distress 20 nautical miles south of Indonesia. It came from a fisherman that had rung the Indonesian police and is being managed by Indonesian search and rescue."
"They've been tracking it overnight, [and] the latest advice that I've got from border protection commands is that we think that this is a false alarm.
"We hope it's false alarm but we're continuing to liaise with Indonesian search and rescue to make sure that that is the case."
Mr Clare says the Indonesian fisherman reported he saw a boat in distress, but authorities have not identified the boat:
"The fisherman said he observed a boat in distress, told the Indonesian police, who then passed that on to Indonesian search and rescue."
"But the advice that we've got from Indonesia is that they haven't identified a boat that is in distress."
8:20am: The Prime Minister Julia Gillard has told AM today's bill is the last chance for Parliament to act on the issue before the winter break:
"The House of Representatives has spoken, there is a bill on the table."
"That bill can be law by the end of today if senators in all good conscience say 'I cannot leave this Parliament with the many weeks between now and the spring session knowing that there are no effective laws in place'."
8:10am: Independent MP Rob Oakeshott has told ABC News Breakfast today's vote is a leadership test for the four leaders of parties in the Parliament - Julia Gillard, Tony Abbott, Christine Milne and Warren Truss.
"Today is a leadership test for the four of them. Whilst I am not confident my bill will get to the end of today and necessarily get through, I am hopeful that those four people in good faith will work in the national interest and negotiation something to stop the deaths and slow the movement of people in the Asia Pacific region."
He says the sunset clause in his bill should encourage all those involved to vote for the plan:
"This is an option that has a sunset clause of 12 months. Let's give it a go and if it fails we can then try something else - but at least let's try this."
And he has called on Australians to lobby Senators to vote in support of the bill:
"I encourage through your show any senator who is watching to really dig deep in their conscience today and to push their party to negotiate."
"And I encourage through your show the Australian people to get in touch with senators and get in touch with leadership of those political parties to say we need to do something."
7:57am: AMSA spokeswoman Jo Meehan has issued a clarification saying the latest boat in distress is reportedly a fishing vessel, and there is no suggestion asylum seekers are on board.
7:43am: Greens Leader Christine Milne has confirmed her party will not support independent MP Rob Oakeshott's bill to reinstate offshore processing when it goes before the Senate.
7:38am: Home Affairs Minister Jason Clare says he received information about a boat late last night, but cautions the reports may not be correct:
"Sometimes the information on this can be a bit fuzzy. Late last night I was advised that there was another boat that was potentially in distress off the coast of Indonesia but through the course of this morning we haven't been able to confirm if that's correct."
"The latest information I have is that it's unlikely to be the case but we're still working with Indonesian authorities on that."
7:34am: Look back on how events unfolded yesterday.
7:25am: AMSA says Indonesia has taken responsibility for the rescue, with the boat reportedly 20 nautical miles south of Java.