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The Indonesian solution -

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TONY JONES, PRESENTER: The Prime Minister has used telephone diplomacy to stop the largest single
arrival of asylum seekers since the election.

The boat was intercepted by Indonesia after the leaders of the two countries spoke on the phone.

It's a crucial intervention because the influx would've pushed the Christmas Island detention
centre perilously close to capacity.

But the top-level intervention has led to questions about whether the move is a rebadged version of
the controversial Pacific Solution.

From Canberra, Hayden Cooper reports.

HAYDEN COOPER, REPORTER: Desperate and in search of a new life in Australia, but these 260 men,
women and children from Sri Lanka never made it to their dream destination, a phone call from the
Australian Prime Minister stopped them.

KEVIN RUDD, PRIME MINISTER: I often talk to the President of Indonesia.

HAYDEN COOPER: He won't reveal the details but Kevin Rudd went straight to Susilo Bambang Yudhoyono
to seek an interception of the approaching ship. Indonesia complied and the boat was escorted into
port by the country's navy, its hapless passengers taken ashore.

ADMIRAL S.B. PONTO, INDONESIAN NAVY: When we asked they say we are going to ask for asylum in
Australia. We don't know what's going to happen with them. Our task is now to bring them here, to
give them medical aid for the injured and helping the pregnant women, the sick and the kids.

KEVIN RUDD: We make no apology whatsoever, in terms of the series of hardline measures that we are
taking in relation to people smuggling and in relation to illegal immigration.

HAYDEN COOPER: Both countries say it's just effective cooperation.

TEUKU FAIZASYAH, INDONESIAN FOREIGN MINISTRY: This is part and parcel of the good relationship
between the two government and the two head of government in this regard. There is a need to
coordinate how we respond to certain issues affecting the two countries.

HAYDEN COOPER: Hours later another boat did reach Australian waters carrying more than 50 people
seeking asylum. They'll join almost 1000 others on Christmas Island.

MALCOLM TURNBULL, OPPOSITION LEADER: Mr Rudd has to eventually, now admit that his border
protection policies are failing. He's lost control of our borders.

HAYDEN COOPER: This year has delivered a steady flow of boats, 32 in total, carrying almost 1,800
people. It's a dramatic change from last year when only seven boats were caught, with 161

The Opposition links the surge with Kevin Rudd's election and his softer approach.

KEVIN RUDD: Our position on the Pacific Solution is absolutely clear-cut and that is: we should use
the facility on Christmas Island instead.

HAYDEN COOPER: Since then Christmas Island has almost filled to capacity. The Government says it
can stretch the facility to hold 1,400.

This is the next option: the Northern Detention Centre in Darwin.

PHILIP RUDDOCK, FORMER IMMIGRATION MINISTER: They've reaped their own whirlwind and what we've seen
is that Australia's borders are now essentially open for people smuggling again.

HAYDEN COOPER: The architect of the Pacific Solution warns that 10,000 more asylum seekers are
waiting to make the journey.

PHILIP RUDDOCK: And some of them will be in Malaysia, some of them will be in Indonesia, some of
them will be in Pakistan, some of them will be in Iran, some of them will be in Syria, Jordan but
it will be a pipeline.

MALCOLM TURNBULL: What we need urgently is an independent inquiry to examine why his policy his
failing, what can be done to address it.

HAYDEN COOPER: Malcolm Turnbull won't rule out a return to the policies of old. The Coalition
senses an opportunity in the growing tide of refugees and the Government knows it, so it's
strengthening its rhetoric and talking tough to reject the suggestion that Labor is a soft touch on
border protection.

KEVIN RUDD: I make absolutely no apology whatsoever, for taking a hardline on illegal immigration
to Australia.

HAYDEN COOPER: And if asking neighbours to keep the boats out becomes a common practice, it's one
that Philip Ruddock supports.

PHILIP RUDDOCK: I see it as being Kevin Rudd's Pacific solution, what he would be seeking is the
processing of people offshore and there detention offshore and their removal if they're not
refugees and resettlement outcomes if they were.

This is exactly what was happening at Nauru.

KEVIN RUDD: It seems to be that Mr Ruddock was the ... also that minister who said that asylum
seekers had thrown their kids overboard. I therefore place zero credibility on anything Philip
Ruddock says about anything since that time.

PHILIP RUDDOCK: I think the Prime Minister when he has no arguments of substance plays the man.

HAYDEN COOPER: For the moment the Indonesians are tolerating Australia's call for help.

GEOFF THOMPSON, INDONESIA CORRESPONDENT: Is Indonesia concerned that it is being used by Australia
to take care of its refugee problem?

TEUKU FAIZASYAH: Well, it's a regional issue as I said.

HAYDEN COOPER: A regional issue with no simple answer.

Hayden Cooper, Lateline.