Tuvalu's Home Affairs Minister Willie Telavi says his country is struggling financially and would carefully consider the implications of housing a regional processing centre for asylum seekers if approached by Australia.
Australia's government currently proposes that East Timor should house asylum seekers, but said it would also consider Pacific countries as long as they're signatories to the UN refugee convention.
Willie Telavi says the atoll does have other priorities and issues to deal with, like its limited land mass and its battle with rising sea levels.
But he admits the atoll's financial situation could be much better.
"Already we have limited land in Tuvalu and we have eight isolated islands so we have to look into that. We have other priorities at this moment looking into our financial situation and given the downturn in the global economy, [and] financial constraints we're facing."