TONY Abbott has praised Treasurer Joe Hockey for “copping a lot of crap’’ in a speech where he came close to admitting Australia has paid Indonesian people smugglers.

Speaking at the NSW Liberal conference in Sydney, the Prime Minister has singled out Mr Hockey for special praise after a tough year, which included calls to sack him in favour of Scott Morrison or Malcolm Turnbull.

“Joe has copped a lot of crap lately. But since the Budget hasn’t it changed? Hasn’t it changed ?’” Mr Abbott said.

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“Because what Joe has done is brought down the best Budget ever for small businesses of Australia. And didn’t the small businesses of Australia finally deserve some recognition and reward?”

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Mr Abbott also came close to confirming Indonesian allegations that Australia paid people smugglers to turn around a boat carrying 65 asylum seekers. It was revealed this week that Labor may have also paid informants in 2010.

“On Monday, Mr Shorten attacked us for allegedly doing something to turn around boats, which it turned out that he had done exactly the same, only it didn’t work when they tried to do it,” he said.

“Because they never turn around a single boat. Then on Tuesday, it became apparent that yet again, Labor was changing its mind on national security.

“Now, I want to make it absolutely crystal clear where this government stands. If you go to Syria or Iraq to fight with a terrorist army, you are committing the modern form of treason.

“And I say: if you go to ... Syria or Iraq to fight with a terrorist army, we don’t want you back. We don’t want you back.”

The Prime Minister also praised rising star Scott Morrison, who many believe is shaping up as future leadership contender.

“Scott Morrison, what an extraordinary man,’’ Mr Abbott said.

“He did what everyone said couldn’t be done. He stopped the boats. And yes, we had to be firm.

“Yes, we had to be prepared to take some risks. Yes, we had to be prepared to be unpopular, but I tell you what, we had to be prepared to stop the boats and we were. And we were. And having stopped the boats, he’s now delivering a fairer and more sustainable pension system for the long term.’’

Mr Abbott also joked that rival Malcolm Turnbull had arrived late to the meeting.

“Malcolm came in late because he’s probably been connecting yet another house to the National Broadband network,’’ he said.

The Prime Minister said voters needed to understand that the unpopular 2014 budget was tough but necessary.

“We were only able to do this because of the hard yards that Joe did, that all of us did in the last budget,’’ he said.