Mr Abbott announced on Friday he would cut the refugee intake by 6000, returning it to almost 14,000 a year.
The Gillard government announced in August it would increase Australia's annual humanitarian intake from 13,750 to 20,000, and to 27,000 within five years.
"We think that with the borders out of control as they are, this is the last message we should be sending to the people smugglers and their customers - that we're making it easier for people to come," Mr Abbott told ABC radio on Friday.
The coalition would reserve 11,000 of the 13,750 humanitarian visas on offer each year for those waiting in refugee camps.
He also said cutting the number of visas on offer would save $1.3 billion over four years.
The other part of Mr Abbott's new plan is to make refugees on bridging visas work for their welfare, which he says would break the "something for nothing mentality".
Mr Abbott said he had run the plan by the coalition's leadership group and was confident the rest of the parliamentary party would support it.
"As you know from time to time on both sides of politics party leaders after consulting their senior colleagues will announce positions that are designed to respond to matters that have come up," he told the ABC on Friday.
"It's very similar to policy that we've taken to the last election.
"I'm confident that would have the overwhelming support of my colleagues."
Challenged about his repeated use of "illegal" to describe people claiming asylum, Mr Abbott said the term had "perfect legitimacy".
The official term for people coming by boat is "irregular maritime arrivals" or IMAs.
But Mr Abbott insisted they were coming "the wrong way" to the country.
"These people are coming to Australia in breach of Australian law, they are illegal arrivals by boat," he said.
Pamela Kerr from the Asylum Seeker Resource Centre said people on bridging visas had been banging on her door begging for jobs.
"I have been meeting with groups of Hazaras and Tamils and trying to link them with community people who can find them jobs," she told ABC radio.
Ms Kerr said these people travelled far and wide in search of work.
But employers were scared to employ those on bridging visas.
She said asylum seekers would far rather do a day's work than sit in some crummy little flat or house being paid a pittance and having nothing to do.
"They say to me the best way to get well after two years in detention is to work, because while you are working you stop thinking about your family, about what happened to you and the lack of a future," she said.
"Work is the best medicine and these are people who embrace it willingly."
Abbott wants to reverse refugee increase
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