Hundreds have drowned making the journey -- as recently as last week a boat sank, killing four people -- with the latest disaster coming just days after Canberra announced a hardline new plan to send all unauthorised arrivals to Papua New Guinea.
Asylum-seekers arriving in Australian waters will now be sent to the Manus Island processing centre on PNG and elsewhere in the Pacific nation for assessment, with no cap on the number that can be transferred.
Even if found to be "genuine refugees" they will have no chance of being settled in Australia, instead having to remain in PNG, be sent back home or to third countries.
In a bid to smash the lucrative people-smuggling networks, Australia on Sunday also announced it would pay rewards of up to Aus0,000 (US0,000) for information leading to their conviction.
Local rescue officials estimated there could have been "up to 200" passengers on the boat which was bound for Australia, while a survivor said some 250 had boarded the vessel.