The question was the most popular of the night among audience members who gave it sustained applause and cheers.
Mr Shorten declined to make a promise to end detention when asked the question three times because he doesn't have regional resettlment agreements resolved.
However, he said he doesn't believe in indefinite detention and thinks regional resettlment should be increased alongside independent oversight. He said he supported resettlement agreements with New Zealand and the United States.
"I do not believe indefinite detention should be the case," he eventually said.
"I believe a Labor government can actually make sure that we don't have to have people on Manus and Nauru because we will prioritise resettling people."
Mr Shorten said he would not restart the arrival of asylum seeker boats, an issue which has dominated several Coalition victories since John Howard in 2001 following the Tampa crisis.
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Mr Shorten has previously ruled out a proposal contained in the Labor party's draft platform to set a 90-day limit on how long an asylum seeker could be held in detention. Left-wing frontbenchers including Linda Burney and Penny Wong had voiced their support for a cap.
In comments that will be seen as being aimed at his colleagues, the Labor leader suggested his personal ratings were less important than his successes in uniting the caucus after the Kevin Rudd and Julia Gillard leadership wars.
A young woman attending Q&A asked Mr Shorten: 'Do you worry that these 'zingers' and the Coalition's 'Kill Bill' strategy represent you as an untrustworthy and shifty character thereby undermining your suitability as potential prime minister?
"No," said Mr Shorten.
His answer was met with laughter and strong applause from the audience.
Mr Shorten said his personal ratings were "one challenge" of his job but not the most important and he claimed that voters were over personalities and wanted policies.
"Personal popularity is one challenge but I tell you what is important, the job I've had since I was Opposition Leader: one, unite the Labor party, we're doing a bit better than we used to do.
"Two: be a strong opposition, ask the banks if they find us a strong opposition, ask Tony Abbott, apparently we were so bad at our job they had to get rid of him. Ask Mr Turnbull if we're a strong opposition, we came very close in the election.
"My team is better than his team," Mr Shorten said.
But when pressed by presenter Tony Jones on why Mr Turnbull is consistently preferred by voters over him, Mr Shorten responded: "Well I know where I started, so anyway, it's been an up and down ride. But I tell you what the polls also tell me, if you want to obsess them, that on any Saturday for the last two years, we'd have won the election".
Two referendums to decide republic
Mr Shorten said Australia's transition to a republic could take two separate votes.
He declined to endorse a call by Australian Republic Movement chair Peter Fitzsimons for a public vote to choose Peter Cosgrove's successor as Governor-General in a "trial run".
Mr Shorten said the method for choosing the Governor-General is "one issue" but the priority was a referendum.
"There should be two questions asked of the Australian people, the first question is 'do we want an Australian head of state?'
"And if the Australian people say that we do want an Australian head of state then we would have a further vote or discussion and a process to involve the Australian people [on] how we select that Australian head of state," he said.
Mr Shorten rejected the claim of a questioner who said it would damage our relations with Britain.
"We'll still be in the Commonwealth Games, I think Prince Charles, or King Charles, when he's the King - I think he'll still like Australia, it won't damage our relations," he said.
Latika Bourke is a reporter for The Sydney Morning Herald and The Age based in London. She has previously worked for Fairfax Media, the ABC and 2UE in Canberra. Latika won the Walkley Award for Young Australian Journalist of the Year in 2010.
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