The first four refugees arrived in June, after Cambodia received a $40 million aid sweetener and Australia allocated an extra $15.5 million for resettlement costs.
But Cambodia has indicated it's not keen to accept any more. "We don't have any plans to import more refugees from Nauru to Cambodia ... I think the less we receive the better," interior ministry spokesman Khieu Sopheak has told The Cambodian Daily. Federal Labor says the deal has become "an expensive joke".
But Mr Abbott insists everything is going smoothly, saying under the arrangement Cambodia had agreed to take "a number" of refugees from Nauru for resettlement.
"It's an agreement that indicates Cambodia's readiness to be a good international citizen," Mr Abbott told reporters in Sydney.
He said when Cambodia was in trouble following the genocide of the late 1970s under the Khmer Rouge, the world rallied to help it.
"Cambodia is happy ... to do its part now that it's in much better shape," he said. Foreign Minister Julie Bishop also denied the deal was collapsing.
"That is not correct. You're relying on an alleged statement of one official," she told reporters in Sydney.
She pointed to a positive meeting with her Cambodian counterpart in early August and said the country was keen to harness the skills of foreign workers to boost its gross domestic product.
Australian Greens senator Sarah Hanson-Young said the deal was always a sham and the government had ignored warning signs indicating just that.
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