Well, 200m are not gonna flee. 12m might. Suppose 2m of them decide to head for Australia. What should you do?
In that situation (the more likely one is Indonesia ends up in say a prolonged civil war) I don't think the Australian government has much choice in the matter either. 2 million desperate people in boats, assuming they could find that many, what force on earth could stop that? And who would have the moral claim to try? And once people are in a country, you just have to find a way to make them not die, don't you?
Countries much poorer than Australia (Pakistan, Iran, Turkey), Lebanon) manage to house a million or more refugees inside their borders.
More realistically, in 1980 our population was 14.5 million, our refugee quota via the UN sponsored resettlement program was 22,000. A lot of that was filled with people fleeing Vietnam (a country which we've started sending people back to be imprisoned by that same regime now, aren't we just great?). That's roughly the equivalent of 36000 per year today, compared with total population. We're also twice as rich in terms of real GDP per capita growth, so that's double the tax revenue and therefore should be double the quota. We are talking 75,000 per year as a comfortable controlled policy option in non-crisis circumstances.
There's about 450,000 refugees in the region between here and Afghanistan, and half of them are on the Bangladeshi border with Burma and tbh probably not going anywhere. Resettling the region's refugees currently in Thailand, Malaysia, Indonesia, about 200,000? Double it again, optimistically, for more Tamils and Hazaras and Iranians if you want. Would be pretty easy if we had the political will.
The "WHAT IF EVERYONE IN THE WORLD COMES FLOODING INTO YOUR COUNTRY" slippery slope is a
terrible argument against upholding the right to asylum and the Refugee Convention. At the point at which something becomes a truly unstoppable "tide" you don't have much choice in the matter anyway, and in practical terms are left with a forced humanitarian crisis and response regardless of your policies.