He said that as well as at least three people killed, several others had been injured in the explosion.
However, Australia's home affairs ministry said the number of dead and injured had yet to be confirmed.
"Border protection agencies have reported there has been an explosion or serious fire on board this vessel," Bob Debus, Australia's home affairs minister said in a statement.
"There are reports from personnel on the scene that this incident has resulted in fatalities, serious injuries and that a number of occupants of the vessel are missing."
He said two navy patrol boats were providing assistance following the incident.
"The government's first priority is to address the immediate situation and to ensure the safety of life at sea."
Thirteen boats carrying asylum-seekers have been discovered in Australian waters since the government of Kevin Rudd, the Australian prime minister, introduced policies last July that softened the country's treatment of asylum-seekers.
Refugees landing on Australian soil peaked in 2001 when more than 1,200 people arrived, mostly from the Middle East.
Many of these maritime journeys have been organised by professional people-smuggling rings.