The Abbott government is prepared to risk too much in its relationship with Indonesia, the federal opposition says.
Indonesia issued a stern warning to the government after it was confirmed Australian navy vessels had entered Indonesian waters on several occasions without permission while conducting border protection operations.
The Indonesian government said it deplored the breaches and its navy will ramp up patrols in areas where the incidents occurred.
It has called on the Australian government to suspend its policy of turning back asylum-seeker boats.
Acting opposition foreign affairs spokeswoman Penny Wong said Indonesia's strongly worded response showed the government didn't understand the importance of maintaining positive bilateral ties.
"Australia's security today and in the future will always require a strong relationship with Indonesia and I fear ... this government just doesn't get that," she told reporters in Adelaide on Saturday.
"(The government) seems willing to put it under too much strain ... You only need to look at what the Indonesians are saying. It's self-evident and the government needs to fix this."
Foreign Affairs Minister Julie Bishop said the government was determined to work with Indonesia in its "common interest" to stop the people-smuggling trade.
However, the government remained tight-lipped on Indonesia's calls to suspend its policy of turning back asylum-seeker boats.
"We are determined to work with our counterparts in Indonesia to stop the people-smuggling trade," the minister told reporters in Perth on Saturday.
"It's in our common interest to prevent people getting on boats and making the hazardous journey to Australia.
"We are determined to do it, and will work with Indonesia to ensure the people-smuggling trade is dismantled."
Ms Bishop said she had written to her Indonesian counterpart Marty Natalegawa to issue a personal and formal government apology.
A formal apology has been conveyed by the Australian embassy's deputy head of mission in Jakarta, David Engel, to the Indonesian government.