The visit to Australia by Indonesian President Susilo Bambang Yudhoyono marks an important step in the maturing of Australia-Indonesia bilateral relations. Not since the ebullient Abdurrahman Wahid have we had an Indonesian president visit twice (Yudhoyono was here in 2005) but, more importantly, Yudhoyono is the most substantial political leader Indonesia has had since the departure of the authoritarian President Suharto.

That Yudhoyono has been invited to address the Australian parliament — and accepted — is a further clear sign of the strength of the bilateral relationship. As a marker of Australia’s international diplomacy, the relationship with Indonesia has always been the biggest and most difficult test. As Indonesia democratises, both countries seem to be getting it right.

The agenda for talks between Kevin Rudd and Yudhoyono is varied and in places complex: matters of benign co-operation such as a common position to the G20 group of countries; co-operation over tracking terrorism; pleas for help over the Bali Nine; the more thorny issues of people smuggling and illegal fishing. And there’s that old perennial — the murder of five Australian journalists at Balibo in 1975, which is currently under investigation by the Australian Federal Police.

Most important to the talks will be how the two countries co-operate on the issue of people smuggling, with Indonesia agreeing to stiffen penalties. For Australia, there will be a greater expectation that once boats leave Indonesian waters bound for Australia they will become Australia’s problem.

Indonesia would also like to see Australia take a more lenient stand on sentences handed out to the seamen who crew the people smuggling boats, given they are invariably just poor fishermen trying to add some cash to their meagre income. The real culprits rarely leave shore, or stay ensconced on “mother ships”, which transfer asylum seekers to smaller craft that then head to Australian waters.

Indonesia will also seek more assistance with housing asylum seekers, while resisting attempts to make it a dumping ground for unwanted migrants. There is too much pride in Indonesia for that, as well as an understanding that the problem is at least a shared one.

And it will ask for greater leniency towards its fishermen who operate in Australian waters. The standard Australian practice of burning captured fishing boats generates great anger in southern Indonesia, a point underscored by President Yudhoyono being accompanied on his visit by the governor of Nusa Tenggara, the province most proximate to Australia that loses the most fishing boats.

Terrorism again has reared its ugly head in Indonesia, with police raids against a new al-Qaeda-linked training camp in the western province of Aceh. Interestingly, the terrorist suspects who have trained in Aceh have come from elsewhere in Indonesia, indicating they believed the once war-torn province is now a haven from police and army observation. Close co-operation between Australia and Indonesia will continue in this field.

Much less public is Australia’s military training program with the Indonesian military, the TNI. Australia renewed its training links some years ago, paving the way for the United States to do likewise. It is now expected to resume training with the TNI’s special forces, Kopassus, which has been identified with but not been held accountable for many human rights abuses across the archipelago well into the post-Suharto era.

A joint statement by Rudd and Yudhoyono today ran the expected theme of “we’re all democrats now”. Yudhoyono’s presidency has indeed confirmed Indonesia on its democratic trajectory, even if his reform program has been hamstrung by a less reformist legislature, some of whom pine for the days of less accountable forms of rule.

As the head of a country that opposes the death penalty, Rudd will raise with Yudhoyono the question of clemency for those of the Bali Nine drug traffickers who have been sentenced to death. Raising this issue is a diplomatic requirement. The response, however, is likely to be equally as consistent; President Yudhoyono does not make exceptions for drug traffickers.

The banning of the movie Balibo, its widespread screening nonetheless and the Indonesian journalists’ challenge to its banning will probably not rate a mention, but the AFP’s investigation into charges of war crimes for the murder of the Balibo Five could be on the agenda. Widow of murdered journalist Greg Shackleton, Shirley Shackleton, is raising this issue in Canberra and through television advertisements.

Australia has an extradition treaty with Indonesia, but Indonesian authorities have already said they will not co-operate with the investigation and that extradition of those charged will not occur. Rudd is likely to let this one go through to the keeper, at best avoiding it as a police matter that will take its own course.

As Indonesia stabilises and grows economically, some trade “ballast” is returning to the relationship. Australia and Indonesia are keen new members of the G20 group of countries and ready to work together on a common agenda for this global forum. This is much less controversial territory.

The often volatile bilateral relationship between Australia and Indonesia is perhaps on the firmest footing it has ever had. Both political leaders will want to leave their meeting having reconfirmed the strength of the relationship, resolving outstanding issues or pushing more difficult problems into the background.

There are still difficulties in the relationship, but it is travelling remarkably well. If nothing else, this tends to confirm the problems that Australia once had with Indonesia were much less about “cultural misunderstanding”, as claimed by some apologists, but the then different political systems of the two countries. As the two increasingly move down the same political path, the “misunderstandings” are disappearing.

*Professor Damien Kingsbury holds a Personal Chair in the School of International and Political Studies at Deakin University.