Australia is reluctant to grant asylum to Cambodians under threat from an anti-democratic crackdown because of embarrassment over a deal to send refugees from Nauru to Phnom Penh, according to Cambodia's exiled former opposition leader Sam Rainsy.
Mr Rainsy pointed to the example of the wife and five children of murdered political activist Kem Ley, who have been in limbo in Thailand for 15 months waiting for Australia to grant them refugee visas.
So far the visa has been denied.
"It would be very embarrassing to accept refugees from Cambodia when you want to send refugees to Cambodia," Mr Rainsy told the National Press Club in Canberra on Thursday.
He said in the eyes of the Cambodian people the refugee deal between Canberra and Phnom Penh was "strange".
"You have produced the most expensive refugees in the world," Mr Rainsy said.
Cambodia agreed in 2014 to resettle refugees from Nauru in exchange for a $40 million aid sweetener and a further $15 million had been allocated for running costs.
Only seven people took up the offer and it's believed only three remain there.
Cambodia's democracy is shrinking, with the country's Supreme Court dissolving Mr Rainsy's Cambodia National Rescue Party last year and jailing opposition leader Kem Sokha.
The opposition was poised to strongly challenge the 33-year rule of Prime Minister Hun Sen at the July election.
AAP understands up to a dozen Cambodian opposition MPs have applied for refugee status with Australian and New Zealand governments since the crackdown.
Mr Rainsy urged the Turnbull government to show more leadership like the European Union and United States and ramp up pressure on the Cambodian regime over the brutal clamp down on dissents.
"Democracy is dead in Cambodia," Mr Rainsy said.
Cambodian Prime Minister Hun Sen is due to visit Australia next month for a special summit with Association of South East Asian Nation (ASEAN) leaders.
The Australian Greens had been pushing for the strongman's invitation to be revoked.
Mr Rainsy expects him to be greeted by Cambodian expats in Sydney with "rotten eggs and tomatoes".
He criticised China for propping up the Hun Sen regime and said Beijing was securing more and more facilities including military bases in Cambodia.
"This will strategically affect Japan, Vietnam, Australia and India," Mr Rainsy said.
"Australia should feel concerned because this could disrupt the balance of power in the whole region."