Australia's new policy of resettling refugees in Papua New Guinea was already having a deterrent effect on boatpeople, Immigration Minister Tony Burke said Monday as angry protesters condemned the plan.

Prime Minister Kevin Rudd, facing an election this year, announced Friday that all asylum-seekers who arrive by boat will be sent to poverty-stricken PNG even if found to be genuine refugees under a deal signed with its Pacific neighbour.

Burke said indications were the plan was already having the desired impact of stopping the arrival of unauthorised boats, many of which have sunk en route in recent years, drowning hundreds of men, women and children.

"It's already having an effect," he told the Australian Broadcasting Corporation, adding that boats that arrived in Australian waters over the weekend had left prior to Rudd's announcement.

"We've seen the reports on the ground, both from people-smugglers... we've heard reports from people who've been considering getting on boats."

Anxious to stop the flow of unauthorised boat arrivals, Australia began sending asylum-seekers arriving by sea to remote Pacific camps on Papua New Guinea's Manus Island and the small state of Nauru last year for processing.

But conditions on both have been criticised by refugee advocates, and the government has removed some women and children from Manus because facilities were not up to standard.

Burke said work was underway to improve the processing centre on Manus and the government would ensure that there was sufficient capacity on the island to deal with however many asylum-seekers arrive.

He said if asylum-seekers were found not to be genuine refugees, they could be returned to their country or origin, remain in detention in PNG or settled in another country in which they have a right of residence.

"Now they don't have a right of residence in Australia, but any of those three options are open," Burke said.

Protesters targeted Rudd in Sydney over the policy which has also caused some concern within his centre-left Labor Party on Monday, bearing placards such as "No offshore processing" and "Refugees are welcome".

Rudd's plan to stop the boats comes as more than 15,600 asylum-seekers have arrived by sea this year, straining immigration facilities and border protection authorities who are often called in to assist them.