A Greens disallowance motion to overturn the tough new rule passed the Senate on Tuesday 31 votes to 29, thanks to support from Labor and the Nick Xenophon Team.
Under the regulations, which SBS News reported on in November, anyone who submitted false or misleading material as part of a visa application - even unwittingly - faced being effectively barred from making a new application for 10 years.
The previous penalty was just 12 months.
Migrants and migration experts who spoke with SBS World News warned the rule could punish migrants for mistakes or deliberate lies from unscrupulous migration agents acting on their behalf.
But Mr Dutton said the rule was a recommendation from the inquiry into the Lindt Cafe terror attack.
"What we sought to do as part of this regulation was to clamp down on those situations directly in response to Lindt Cafe," he told reporters at Parliament House on Wednesday.
"Now, I don't think Labor realised that. I think they've just pulled this stunt in the Senate - as I say, for what reason I don't know. But there are serious consequences."
Mr Dutton said Labor had "twice" sided with the Greens on motions that would make "our community less safe" and "our borders less secure", also referring to a bill that recommended refugees from Manus Island and Nauru be settled in New Zealand.
FOR FULL STORY PLEASE CLICK THE LINK BELOW: