Prime Minister Tony Abbott says everyone collects information about others and Australia does it only for good.
Mr Abbott said Australia's relationship with Indonesia was now vastly better than it was a few months ago under Labor, despite recent spying allegations.
He said the coalition wasn't responsible for the ban on live cattle exports, for the Oceanic Viking asylum seeker fiasco or the East Timor detention centre disaster.
"And when did this so-called spying take place ... under the former government," he told ABC television.
"All countries, all governments gather information. That's hardly a surprise. It's hardly a shock. We use the information that we gather for good, including to build a stronger relationship with Indonesia."
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The government has dismissed diplomatic tensions which have arisen from leaked documents showing Australia has engaged in a US-led intelligence-gathering operation from its embassy in Jakarta.
Mr Abbott said he had offered to elevate the level of information sharing with Indonesia during talks with Indonesian Vice-President Boediono on Wednesday.
"I want the people of Indonesia to know that everything that we do is to help Indonesia as well as to help Australia," he said.
"I want nothing but the best for Indonesia. I certainly want the boats stopped and that is overwhelmingly in the interests of both our countries."
