The frontrunning candidate in Australia's election, Tony Abbott, would pay Indonesians for unseaworthy boats to stop them from ending up with people-smugglers, as part of a plan unveiled Friday.

Abbott, who is leading Prime Minister Kevin Rudd in opinion polls ahead of the September 7 vote, said he would step up on-the-ground operations in Indonesia with a "community outreach" scheme aimed at disrupting people-smuggling rings.

The Aus$440 million (US$397 million) scheme would include a capped government buy-back plan for the leaky fishing vessels used to ferry asylum-seekers as well as stipends for Indonesian "wardens" in 100 villages to spy for Australia and bounty payments for information leading to successful smuggling prosecutions.

Abbott declined to comment on whether he had spoken to the Indonesian government about his plans, which were ridiculed as "crazy" and "bizarre" by the ruling Labor party.

"It's much better and much more sensible to spend a few thousand dollars in Indonesia than to spend $12 million dollars processing the people who ultimately arrive here," Abbott told reporters.

He refused to "put a figure on" how much he would be prepared to pay per boat and said allowances or bounties would be left to the discretion of "our people on the ground".

"It is absolutely in Indonesia's interest to stop the boats, I have no reason to think that the Indonesians won't be prepared to work cooperatively and constructively with us," Abbott said.

Asylum-seekers arriving by boat, often via transit hubs in Indonesia, are a major political issue in Australia and tend to dominate election campaigns, despite coming in relatively low numbers by global standards.

Both major parties have pledged a crackdown on the issue -- Rudd's Labor government has signed an agreement with Papua New Guinea to banish boatpeople there for permanent resettlement even if found to have a valid refugee claim, effectively closing Australia's borders to those arriving by boat.

Abbott has argued for a military-led border patrol operation for the heavily-trafficked sea corridor between Australia and Java, and towing boats back where possible.

Immigration Minister Tony Burke rejected Abbott's latest plans as "simply crazy policy" that would only benefit the Indonesian shipbuilding industry.

"Of all the mad ideas I've heard in immigration, I think boat buy-back wins," he said, adding that Indonesia had one of the largest fishing fleets in the world.

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