Canberra sends asylum-seekers who try to enter the country to offshore processing centres in PNG's Manus Island and Nauru, blocking them from resettling in Australia.
The conservative government has instead worked to relocate those found to be refugees within PNG or to third countries such as the United States and Cambodia.
The push to move the more than 800 refugees on Manus has sped up with the camp due to close down after a PNG Supreme Court ruling last year declared that holding people there was unconstitutional and illegal.
He said those who miss out are "staying in PNG, that's the arrangement as it currently stands".
"If people have been found not to be refugees, then the expectation is that they will be returned home."
Prime Minister Malcolm Turnbull, who is in Port Moresby for talks with his PNG counterpart Peter O'Neill, would not comment on whether refugees would be moved to the Nauru camp, which currently holds 380 men, women and children.
Successive Australian governments have sought to stem waves of boat migration by people from war-torn countries, using harsh policies including turning back the vessels.
A resettlement agreement with Phnom Penh struck in 2014 was criticised after only a few refugees made the move.
The US resettlement agreement hit global headlines earlier this year after President Donald Trump reportedly lambasted Turnbull during a phone call and attacked it as a "dumb deal".
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