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VIRGINIA TRIOLI: The Government is preparing for a busy month ahead with key talks between India, Indonesia and the United States, they're all on the agenda.

MICHAEL ROWLAND: The Foreign Minister, Stephen Smith, has just returned from a public relations tour of India and is now dusting off the welcome mat for both the Indonesian and American Presidents.

The Minister joins us now from Canberra.

Mr Smith, thanks for joining us this morning.

STEPHEN SMITH: Good morning Michael.

MICHAEL ROWLAND: I've just spoken to Fergus Hanson of the Lowy Institute in Sydney.

They, as you probably know, have released a report that casts a pretty dim picture of the state of the Australia-Indonesia relationship. Is it as bad, is it as pessimistic as they say?

STEPHEN SMITH: I think it is a pessimistic report, although it does have some good suggestions for the future which I'll come to, but the Australian Government inherited a good relationship with Indonesia from our predecessors. That wasn't always the case, but when we came to office in December 2007 it was in good shape, and we think that the relationship has gone to an even higher level since that time.

Indeed, there are people on both sides, Australia and Indonesia, who believe that the relationship has never been better. It's one of our most important relationships and the fact that the President is coming with a large delegation and addressing a joint sitting of our Parliament underlines and reflects the importance of the relationship into the future.

Indonesia, of course, is a near neighbour, but Indonesia is now emerging not just as a regional influence, but as a global influence, as a member, for example, of the G20. And that underlines the long-term strategic, economic and social importance of Australia working very closely with Indonesia.

MICHAEL ROWLAND: How much of a sticking point will the always contentious issue of people smuggling be when the Indonesian President sits down with the Prime Minister today?

STEPHEN SMITH: When you're dealing with close relationships with your neighbours, there will always be issues that you need to deal with, whether it's the movement of people, or whether it's issues of capital punishment and the like. But I think the qualitative change that we see in the relationship now is that we can deal with these matters almost on a business as usual basis.

There was a time in the past when such issues would have, frankly, rocked the relationship, but the relationship's much more mature.

So we'll obviously have a conversation with the Indonesian delegation, the Prime Minister with the President and me with my counterpart, Foreign Minister Natalegawa, about working together and the very difficult issue of displaced people and people movement and people smuggling.

That will obviously be one of the things that we talk about and we're both committed to working closely together on a regional basis on that front. And that's why some years ago Australia and Indonesia established the so-called Bali Process where countries and institutions in our region work closely together on the people smuggling front.

MICHAEL ROWLAND: If I can just touch on a couple of other issues now. We're getting breaking news from Israel that another Australian has been named in the so-called Dubai assassination, an Australian's name being used on a passport there. If that is the case, how will the Government treat that news?

STEPHEN SMITH: Well certainly so far as we're concerned, we regard this matter very much now as operational.

I would not be proposing to be commenting on breaking news about other Australian passports caught up in this matter. Suffice to say that we've been working very closely with the United Arab Emirates authorities on this matter.

We've made our view crystal clear in terms of the abuse of Australian passports. We currently have an Australian Federal Police investigation team in Israel pursuing the investigation which the Government asked it to start on the abuse of passports.

But I'm not proposing to be drawn on speculation about what we regard very much as operational matters both for the UAE authorities, but also for the Australian Federal Police investigation.

MICHAEL ROWLAND: Stephen Smith, Fairfax newspapers are reporting this morning that there's considerable anger within the top ranks of the US military over Australia's refusal to allow Australian troops to deploy militarily in Afghanistan. It quotes - or it talks about a phone call it reportedly says has been made by the US Commander in Afghanistan, General Stanley McChrystal, to our Defence Force Chief, in which General McChrystal says that this policy is making it incredibly difficult for the coalition in Afghanistan.

STEPHEN SMITH: I'm obviously not in a position to comment on any suggested, or alleged phone conversation between General McChrystal and the Chief of our Defence Forces.

In every conversation I have with my Secretary of State counterpart or, indeed, with the Secretary for Defence, Bob Gates, the United States has nothing but the highest appreciation for the role that Australia plays in Afghanistan, in Oruzgan Province. And that's been the long-standing view, not just of the United States, but of the International Security Assistance Forces and also other NATO countries.

So we make a substantial contribution to Afghanistan and we're very proud of that contribution as the largest non-NATO contributor, to staring down international terrorism in Afghanistan and the Afghanistan-Pakistan border area.

MICHAEL ROWLAND: And finally Minister Smith, very briefly, there appears to be some doubt in US political circles that Barack Obama may, indeed, make his scheduled trip to Australia given the high stakes deal involving the health legislation in the US Congress. Do you have a guarantee that the US President will hit these shores?

STEPHEN SMITH: Certainly we're proceeding on the basis that the United States President, President Obama, will visit Australia later on in this month. We're looking very much forward to that, just as I'm sure President Yudhoyono is looking forward to President Obama's visit to Indonesia.

So we're proceeding on that basis and we welcome both Presidents very much to Australia. Both visits reflect the importance of the relationship we have with Indonesia and the ongoing alliance we have with the United States.

MICHAEL ROWLAND: Stephen Smith, thank you very much for your time this morning.

STEPHEN SMITH: Thanks Michael. Thanks very much.