Merle Hathaway from Ballarat Rural Australians for Refugees said settling the families in Victoria could bring struggling rural towns in the region back to life. 

“You could treat this the same as the Snowy Mountain scheme, where people were settled in communities for a certain amount of time and often ended up staying in the communities,” she said, using the example of the estimated $40 million economic boost refugees from Myanmar have given the town of Nhill. 

Ms Hathaway said refugees already in Ballarat were keen to contribute by working but immigration rules meant some could not. 

She also denied resettling them would be a drain on state money. 

“You don’t need public housing if you’re allowed to work...it’s not an either or situation (between supporting vulnerable Australians),” she said. 

Mr Andrews published an open letter to Prime Minister Malcolm Turnbull on social media on Saturday offering to take responsibility for 267 asylum seekers, including 37 babies born in Australia, who could be sent back to Nauru. 

“...I write to inform you that Victoria will accept full responsibility for all of these children and their families including the provision of housing, health, education and welfare services,” he said. 

Mr Andrews was criticised over the weekend for not publicly opposing offshore detention at the ALP national conference, and Deputy Opposition Leader David Hodgett slammed the letter as a stunt. 

“We've got a V/Line crisis, a deficit budget, increasing crime rates, billions wasted on tearing up the East West Link contract and Daniel Andrews is focussed on cynical grandstanding on federal issues,” he said in a statement. 

Malcolm Turnbull said on Sunday the government would look at individual asylum seeker cases, like the five-year-old boy who was raped. 

“We are dealing with these issues, these very delicate, these anguished issues Barrie, with compassion and we're dealing with them on a case-by-case basis. But what I'm not going to do is give one skerrick of encouragement to those criminals, those people smugglers, who are preying on vulnerable people...” he said on ABC program Insiders. 

Federal Labor has not been supportive of the Premier’s letter, with a spokeswoman for federal opposition immigration spokesman Richard Marles saying the Opposition wants the government to find a “credible third country for resettlement arrangements”. 

The Ballarat chapter of advocacy group Grandmothers Against Detention of Refugee Children will hold a protest outside Ballarat MP Catherine King’s office on Monday, February 15 at 10am to protest the government’s treatment of asylum seekers.