Indonesia, Australia and Boatpeople

source: Yahoo News/AFP

Indonesian President Susilo Bambang Yudhoyono arrived in Australia on Monday as a political storm over people-smuggling raged, with the "evil trade" looming large in talks with Prime Minister Julia Gillard.

The Indonesian head of state was met by Gillard as he touched down in the northern city of Darwin for their second annual high-level meeting.

"I will be talking to the president of Indonesia over today and tomorrow about our economic links... about our people-to-people links, about our joint strategic interests in the region in which we live," Gillard told ABC Radio.

"Of course we will also be talking about the evil trade of people smuggling."

Canberra is facing a steady influx of asylum-seekers coming to Australia by boat, many of whom use Indonesia as a transit hub, boarding leaky wooden vessels there after fleeing states such as Afghanistan and Iran.

While the numbers are not large on a global scale, with 5,242 coming on 72 boats so far in 2012, boatpeople are a politically explosive issue in Australia, with the matter a key concern in the 2010 election.

More than 90 people have drowned in recent days after their boats sank en route.

Asked about whether whether Indonesia had the resources to conduct mass rescues at sea, Gillard said: "We will be talking about these questions as we talk through the full suite of our relationship."

Defence Minister Stephen Smith, also in Darwin, said the Australian navy had advised that it had sufficient resources to do its work, but added "there's no doubt that there was a high operational tempo".

Smith said the people-smuggling issue would be on the agenda when Yudhoyono and Gillard met for formal talks on Tuesday and said Canberra was already working closely with Indonesia on the issue.

"That general issue, given its importance, will be the subject of conversation between the prime minister and the president in the course of their meetings," he told reporters.

"But Australia works very closely with Indonesia to prevent people-smuggling operations. I think it's under-appreciated, the number of successful disruption events that occur through close cooperation."

Gillard wants to deter boatpeople by transferring them to Malaysia for processing, in exchange for accepting thousands of that nation's registered refugees for resettlement.

But her minority government has been unable to pass the required legislation through parliament because the left-leaning Greens and conservative opposition have refused to back it.

Conservative opposition leader Tony Abbott has pledged to "stop the boats" by turning back vessels where possible and otherwise processing asylum-seekers on the Pacific island nation of Nauru.

Yudhoyono's visit comes after the United States announced last November a plan to bring some 2,500 Marines to Darwin by 2016-17, a move which rankled some in Asia.

Indonesian Foreign Minister Marty Natalegawa has previously said the stationing of US Marines Down Under needed to be better explained to all countries in Asia to avoid "mistrust".