Taoiseach Leo Varadkar has said he does not believe Direct Provision is inhumane, however he said it was not a perfect system.
Speaking at an Integration and Inclusion conference in Dublin, he said it should not be controversial to speak out against illegal immigration.
Last week Mr Varadkar was criticised after he said that Georgian and Albanian migrants travelling to Ireland with fake documents are behind a rise in asylum seekers coming here.
At the event, he said: "It shouldn't be a controversial thing to say that you support and welcome legal migration but you don't support illegal migration.
"We will continue to step up our efforts to stop people being trafficked into Ireland by gangs and also those who seek to enter Ireland unlawfully as individuals."
The Taoiseach defended the Direct Provision system and said the Government has not yet come up with a better system, but he said it is open to finding alternative solutions that are viable and affordable.
He said: "We are improving standards in line with the McMahon Report and newer accommodation such as as what's proposed in Ballinamore offers own door self-catering accommodation and that's exactly what we want to have for everyone."
Referring to protests against Direct Provision centres in some areas, he said he was concerned that some people were opposing accommodation centres in their area under the guise of "humanitarianism and opposition to direct provision".
"I think we need to call out the scaremongering of those who seek to exploit local concerns for their own political, personal or racist reasons."
He said the alternative is what happens in France, Greece and Italy, which are camps and containers, and he said he was determined that it would never come to that point in Ireland.
The Taoiseach said there are a lot of problems in Irish society including the housing shortage but he said none of these are caused by migration.
He told the conference that migration has enriched Ireland but said the Government needed to communicate better with local communities where migration is taking place.
Mr Varadkar said migration does present challenges and if people feel their identity is under attack they will respond in ways the Government understands - even if it does not agree with it.
He said that in some situations the trust of communities has been broken but he said the Government is working to rebuild that trust.
He said there were no protests in communities that already have direct provision centres, because, he said, the fear of the new evaporates when people meet the reality.
Speaking after the conference, Mr Varadkar said he was concerned about the rise in racist rhetoric across the country, however, he said it does not reflect the vast majority of people's views.
Minister for Rural and Community Development Michael Ring has called for a "national debate" on immigration and asylum-seekers.
Mr Ring said that communities need to be given proper information before asylum-seekers are located in their towns or areas, and said he was "angry" that he wasn't fully informed about plans to move a group of people into Achill in his own Mayo constituency.
The proposal to locate 13 vulnerable women has caused controversy in Achill and prompted protests by some members of the local community.
"I was angry that I wasn't told, people were ringing me up, nobody had the facts, I know now that the Department are going to set up an inter-departmental committee to talk to people in future," he said.
Asked if he favoured replacing the Direct Provision system with an alternative, Mr Ring said:
"It's alright saying that. Some of these people coming into the country are under very difficult circumstances, they're fleeing from countries that's it's not safe to be in, both men and women, and we're doing our best to provide the best facility we can provide for them.
Meanwhile, Brian Killoran, CEO of the Immigrant Council of Ireland, said Ireland had an informal approach to integration and he said it wasn't resourced very well.
He said that this can result in issues "exploding" if they are not handled properly.
Mr Killoran said there are many areas in rural Ireland that have not had enough investment in education, housing or health.
He said that these problems mixed in with fear around migration and agitation by people who are on the right wing result in a volatile mix -- which he said can potentially cause a lot of problems.
Mr Killoran said the vast majority of people in Ireland are positive about migration.
However, he said that in some cases migrants experience hate crime and racism and struggle to get into housing and employment.
He said it's impossible to feel integrated in Ireland when living in Direct Provision because he said it was essentially "Ireland's waiting room."