"The concern would be if one boat made it to New Zealand, that opens up a pretty easy pathway for people to replicate."
A law change in 2013 gave the Government greater powers to manage a "mass arrival" of asylum seekers, defined as more than 30 people.
In that event, the Government has power to detain arrivals for up to six months. This detention could be extended by 28 days with approval from a judge.
Refugees who arrive in New Zealand under the quota system receive a six-week orientation course at the Mangere Refugee Resettlement Centre.
Those who travel on false documents can be detained, some in prison, while their security risk is assessed.
Labour leader Andrew Little said he did not believe there was any risk of a boat of asylum seekers making it to New Zealand and accused the Prime Minister of beating up the issue as a distraction.
ABC News reported that Indonesian police said the boat had crashed on to a reef after being turned around by Australian authorities.
The passengers included 54 Sri Lankans, 10 Bangladeshis, one person from Myanmar and five additional crew, and they were being held on Rote Island, off West Timor.
Sadun Kithulagoda, president of the United Sri Lanka Association, said his heart broke for asylum seekers desperate enough to take such an action.
However, he also believed that countries such as New Zealand needed to "draw a line" so as not to encourage more people to pay criminal syndicates and put their own lives at risk.
Colin Henry of the Refugee Council of New Zealand said it was highly unlikely any refugee boat could make it to New Zealand, regardless of what people on board said their ultimate destination was.
Mr Henry said the council would like to see New Zealand take in an emergency quota of refugees, over and above the current annual limit of about 750 places for refugees on United Nations waiting lists.
Mr Henry said he did not have details of the boat Mr Key referred to, however it was likely the Sri Lankans said to be on board had been displaced by civil war.