Australia is well prepared to deal with a potentially deadly swine flu outbreak if one occurs, the Australian Medical Association (AMA) said on Monday.

"There's been suggestions of fever tents, how to decamp patients from primary care into isolation areas, how the hospitals would cope," AMA president Rosanna Capolingua told ABC Radio.

One of Australia's top influenza experts, virologist Alan Hampson, said the disease could already be in Australia.

"It's very hard to screen for influenza coming into the country because what we do know is that people can be infected and not show the signs of disease in the early stages, but can be spreading the disease now," Hampson said.

Hampson added that while swine flu didn't appear to be as unpredictable as avian flu, it has been quite different to regular human influenza viruses.

"It is sufficiently different to be able to readily infect people and probably overcome existing immunity to existing H1 viruses," Hampson said.

The new influenza strain, feared to have killed 86 people in Mexico and infected 20 in the United States, has pandemic potential, the World Health Organization warned on Sunday.

Meanwhile, the New Zealand government has said 10 local students who had just returned from Mexico have tested positive for influenza A and are believed likely to have contracted swine flu.