INDONESIAN military officials caught trying to smuggle galahs and parrots on a plane Australia had gifted the island nation were allegedly let off because customs staff deemed it "government-related".

A Sydney bird store owner who on Wednesday sold the galahs to the Indonesians last night made the claim after an Indonesian national received only a warning when caught trying to leave the country in a decommissioned C-130 Hercules aircraft.

"I told customs these guys have had a slap on the wrist and any other Joe Blow would be thrown into jail for smuggling," Berkshire Park Bird Farm & Pet Supplies owner Chris Hibbard said.

"Customs basically said there was not going to be anything happening because it was government-related. You could just put two and two together. You could read between the lines."

But the Abbott government rejected the claims, labelling suggestions that Customs and Border Protection dealt with the issue differently because of the Indonesian involvement as "false".

The case threatens to be another diplomatic flashpoint between the countries amid fallout of the current spying crisis.

The Indonesian officials were picking up the first of nine Australian Defence Force aircraft, given to them free or discounted, at Richmond Air Force Base, west of Sydney, on Thursday when they were caught with five native Australian galahs and two parrots.

media_camera Picture: Daily Telegraph

The birds were all alive, allegedly hidden in bags, and the galahs included three 15-week-old babies and two mature birds. Customs conducted another inspection of the plane during a refuelling stop in Darwin and found two more parrots, allegedly hidden in a duffle bag which the Indonesians had not owned up to.

The parrots were surrendered amid questioning of two Indonesian officials, believed to be air force pilots, but the plane was allowed to continue on to Indonesia, with only a warning given.

Penalties for wildlife trade offences can go up to 10 years jail and or a fine of $170,000.

Mr Hibbard, who was last night caring for the birds at his store near the RAAF base, said he warned the Indonesians when they came into his store that the galahs were native and protected and they could not be taken out of Australia without government approval.

He sold the five cut-price galahs in a cash deal for $500 - normal price $125 each - but did not sell the parrots, some of which he said were indian ringnecks and were foreign and unprotected.

He said he knew the Indonesians were from military because of the plane at the nearby RAAF base.

"I had my suspicions. But at the end of the day we can't refuse them sales. It is not our job to be the police officers," he said.

Border Protection Minister Scott Morrison's office last night rejected the claims against his department, saying it consulted with the Commonwealth Director of Public Prosecutions and found insufficient grounds to take legal action beyond a warning.

"This case was handled strictly by the book," the spokesman said.

The bird store owner's claims emerged after Mr Morrison's office said earlier the Indonesians were let off with a warning because the birds were deemed unprotected. Bird experts had disputed this because the galahs alone were believed to be native and protected.

Mr Morrison's spokesman last night said the unprotected claim referred to the birds that arrived in Darwin, which were only parrots, and noted the galahs had not left Richmond airport.

"There were no native protected birds on the flight from Sydney," the spokesman said.

Prime Minister Tony Abbott earlier confirmed he had been briefed on the bird issue but, when asked about the involvement of Indonesian officials, would only say he wanted to build a positive relationship with the nation.

"From time to time Australians do things in Indonesia and it shouldn't be a complete surprise that occasionally it's a two-way street," Mr Abbott said.

media_camera Chris Hibbard owner of Berkshire Park Bird Farm & Pet Supplies.