Prime Minister Malcolm Turnbull has staunchly defended Immigration Minister Peter Dutton's response to proposals to significantly increase Australia's refugee intake.
Heavily quizzed on the comments while campaigning in Cairns, the Prime Minister said Australia's refugee intake policy was "one of compassion".
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"Peter Dutton has been an outstanding Immigration Minister," Mr Turnbull said.
"This is no criticism. People that are coming out of the war ravaged areas, out of the horn of Africa and other places in the world, of course they have - many of them have never been employed.
"Many of them have not had much education. Many of them are illiterate in their own languages."
Opposition Leader Bill Shorten blasted Peter Dutton over the comments, likening him to One Nation leader Pauline Hanson.
"Mr Dutton's comments are comments Pauline Hanson would have been proud to make," he told reporters in Sydney.
"Mr Dutton didn't just insult refugees when he made those comments. He insulted the millions of migrants who've contributed to making this a truly great country - refugees like Victor Chang, like Chris Pratt, like Frank Lowy."
Bill Shorten added Mr Turnbull should have condemned the comments and apologised, if he had "any shred of self-respect".
"Australians expect more from their Prime Minister," he said.
"They expect more from this electoral process that we are undertaking, than the scare campaigns and pathetic lies."
The Labor Party is facing fresh pressure of its own after it was revealed Batman MP David Feeney failed to declare a $2.3m negatively geared home.
Mr Feeney has conceded he did the "wrong thing".
Bill Shorten told reporters Mr Feeney still has his support.
"I have expressed to him how displeased I am about this matter. It is unacceptable. He has assured me that he has already written to correct the record," Mr Shorten said
The Opposition Leader was in Sydney's Port Botany this morning, announcing $175 million in funding for freight rail at the port, before heading to the marginal seat of Macarthur in the city's west.
Dutton defends comments
Mr Dutton has defended his comments, saying 23 per cent of women and 17 per cent of men coming to Australia through the Refugee and Humanitarian Program are illiterate in their own language.
Fifteen per cent never attended school and 46 per cent have never undertaken paid work, he said in a statement.
"Refugees and humanitarian entrants are selected not because they have skills, but because they face persecution or serious discrimination," he said.
"We should not be surprised that entrants under the Refugee and Humanitarian Program need considerable and specialist long term support to settle into our country."
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The Greens have called on Mr Turnbull to sack the minister, accusing him of making xenophobic comments.
"They are not just an attack on refugees, they're an attack on families right around the country - families like mine," leader Richard Di Natale told reporters, reflecting on his Italian heritage.
Last week, government backbencher George Christensen declared he didn't want any of the 12,000 Syrians coming to Australia as part of a special intake resettled in his Queensland regional electorate because they would increase competition for local jobs.
But other rural areas are lining up with welcome mats, keen for an economic stimulus and to fill worker shortages in agriculture and meat processing.
A study last year found resettlement of 170 Karen refugees from Myanmar (Burma) in the rural Victoria town of Nhill had created 70 jobs and added $40 million to the struggling community's economy.
Refugees in numbers
* Australia's annual refugee intake is 13,750.
* That rises to 18,750 by 2018-19.
* There is also a special intake of 12,000 from the Syrian conflict.
* Labor wants to increase the annual intake to 27,000.
* The Greens want to take in 50,000.
SBS reporter Omar Dabbagh is on the campaign trail with Opposition Leader Bill Shorten in Sydney.
