The comments come after Foreign Minister Julie Bishop, following high-level talks with Dr Natalegawa on Thursday, said Australia would "not undertake any act or use our assets and resources, including intelligence assets, in any way to harm Indonesia".
Ms Bishop said the Australian government regretted the hurt caused to President Susilo Bambang Yudhoyono by media reports of alleged tapping of his mobile phone by Australian intelligence officials four years ago.
But the prime minister said Australia had not agreed not to spy on Indonesia in the future.
"No. And they certainly haven't agreed to stop collecting intelligence on Australia," Mr Abbott told Fairfax radio on Friday.
"But we are close friends and strategic partners."
Dr Natalegawa is expected to report to the Indonesian president later on Friday, with Dr Yudhoyono also expected to make a statement.
The Indonesian foreign minister said Mr Abbott's comments were "not necessarily" a contradiction of assurances given by Ms Bishop.
"It's a description of fact in terms of intelligence and information gathering. It's something that countries conduct and carry out," he said.
"My understanding is it's part and parcel in co-operation between countries.
"After all, intelligence co-operation is provided for under the Lombok Treaty."
Mr Abbott also refused to confirm whether Australia had agreed to the six-point plan that Dr Yudhoyono had demanded Canberra follow before relations are normalised.
"What we've agreed to set up is a much better channel of communications, a hotline, if you like, so that when issues arise they can be dealt with quickly before they become a public drama," Mr Abbott said when asked if Australia had agreed to Dr Yudhoyono's "roadmap" to restoring co-operation.
"We're certainly very happy to have a more extensive, more formalised intelligence and security relationship because we think that's in the best interests of both countries," he said.
Dr Natalegawa downplayed Mr Abbott's comments, describing ongoing discussions with Ms Bishop as "a process".
"We are now working earnestly and purposely to achieve progress and I think the discussion with Minister Bishop ... was productive, was very constructive, and I'm looking forward to making further progress," Dr Natalegawa said.
"The president is very much privy to the discussions."
Ms Bishop on Thursday announced a so-called "hotline" between herself and Dr Natalegawa would be established at Indonesia's request in the hope of avoiding future diplomatic skirmishes. She also said Australia had agreed to follow Dr Yudhoyono's roadmap to normalising relations.
"We note the steps set out by President Yudhoyono that must be taken in order to normalise the relationship and, of course, we agree to adhere to those steps," Ms Bishop had said.
However, Dr Natalegawa has insisted that military and police co-operation, as well as sharing of intelligence, would not be restored until all six points in Dr Yudhoyono's roadmap are addressed.
He also refused to nominate a time-frame for discussions around the code of conduct which Dr Yudhoyono demanded in the wake of revelations his phone, and those of his wife and inner circle, were monitored by Australian spies in 2009.
The president has insisted that the code of conduct must address the spying issue and contain protocols to ensure similar espionage activities do not occur again, and that it is signed by himself and Mr Abbott.
However, even if the code of conduct is implemented, there would be a period of evaluation, before Indonesia would agree to restoring co-operation in areas such as the military and police, including joint efforts aimed at combating people smuggling.
Source : Yahoo
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