Fishermen have rescued more than 180 suspected asylum seekers from the waters off Indonesia's southern coast.
Australia's 7 News says at least 5 people have died - 1 small girl and 4 adults, but numbers are climbing.
An unknown number are feared missing after the boat they were travelling on broke up in heavy seas near the island of Java.
It's the latest in a series of similar incidents in the seas between Asia and Australia.
Immigration rules
Australia announced last week that it will deport all asylum seekers arriving on its shores to Papua New Guinea, that includes survivors of today's disaster.
The "very hard line" move is an attempt to deal with the increasing number of asylum seekers who travel to Australia in rickety fishing boats.
The influx has become a significant political issue for Mr. Rudd and his announcement comes just months ahead of an election his Labor Party is widely expected to lose.
Unveiling the policy Mr. Rudd, who ousted Julia Gillard last month, said "From now on, any asylum seeker who arrives in Australia by boat will have no chance of being settled in Australia as refugees."
In exchange, Australia will offer aid to Papua New Guinea.