It's not slavery, it's basically illegal migration by claiming to be a refugee. Rather than engage in the orderly process of getting a visa by getting approval of refugee status from the UN, they decide to go to Indonesia, pay a "people smuggler" who will organise things to get them into Australian waters, then ring some government department to send the navy to go pick them up because their little dingy is probably going to sink soon. Before getting picked up, they discard all their identification papers. Once being processed, they claim they're refugees, escaping persecution, ignoring the fact that they would have passed through four or five different countries who aren't persecuting them.
If they were neighbouring countries, it would be a different matter, but because they're travelling to Australia, I don't think a lot of them are genuine refugees, after all, they're not being persecuted in Indonesia. It's quite a terrible joke what the people smugglers do. If you look on a map to see where 'Christmas Island" is, in relation to Indonesia, you will see why they do it; because it's not ridiculously far from Indonesia and once in Australian waters, our government is compelled to do something. Unlike the US-Mexican border, where many people try to get into the USA and evade detection, in our case, there is absolutely no compulsion to avoid detection, they actually want to be picked up and processed, that way they can get legal entitlements (read: welfare).
Australia is a well-to-do country, and, while some of the immigrants will be escaping some form of persecution worthy of resettlement, a lot of them are economic migrants who are arriving by boat to avoid having to go through the proper, overly bureaucratic procedures. This is unfair to the people who haven't got the money to pay a smuggler. Apparently it's in the vicinity of ~$AU10,000 that people smugglers charge. It's not an insignificant sum of money.
With that brief background, my opinion is that the bribing, and general expenses around people smuggling, means that a lot of that cost is parked in the Indonesian economy. A few thousand Australian dollars is a huge amount in Indonesia, considering their largest currency denomination is worth about $AU10. I just get the feeling that the diplomatic problem is that they know it's happening, they know it's wrong, but they're on the beneficiary side to it, so they don't want it to change.
The NSA has very little to do with this. It's a broader issue with two countries playing politics and politicians trying to win elections. There's that underlying sentiment of the public, and politicians will generally play to nationalistic tendencies, to appear strong. It happened here, and the Indonesians, with an impending election, are doing same.