Foreign Minister Julie Bishop insists it is appropriate for Australia to continue providing limited training to Myanmar's military, despite the atrocities committed against Rohingya people.
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Earlier this week, Labor's defence spokesman described Australia's ongoing military ties with Myanmar as "totally untenable".
More than 700,000 Rohingya people have poured across the border to Bangladesh to escape Myanmar's troubled Rakhine since last August following a military crackdown.
The Myanmar military has been accused of committing rapes, murders and razing Rohingya villages.
The United Nations has described the situation as a "textbook case of ethnic cleansing".
While the United Kingdom, United States, European Union, France and Canada have cut ties with the Myanmar military, Australia's program continues.
Military assistance is worth almost $400,000 and involves training in humanitarian assistance, disaster relief, peacekeeping and English classes.
Ms Bishop said Australia had an arms embargo against the Myanmar military and doesn't have joint exercises.
"What we are seeking to do is engage in dialogue," Ms Bishop told reporters in Sydney
The foreign minister had talks on Friday with Bangladesh Prime Minister Sheikh Hasina, who is in Sydney to receive a leadership award at a global women's summit.
The pair discussed the prospects of Rohingya refugees returning to Myanmar from the camps in Cox's Bazar, Bangladesh.
Australia has so far committed $31.5 million to the Rohingya refugee crisis.
Australian Associated Press
