School children at a welcome ceremony with Australian Prime Minister Anthony Albanese and Indonesian President Prabowo Subianto at the Merdeka Palace in Jakarta in May (Bay Ismoyo/AFP via Getty Images)

The Australia-Indonesia pact won’t shift the regional balance

But this diplomatic win for Australia does reflect warm neighbourly ties.

Susannah Patton

14 November 20253 min read

In the sunlit uplands of Australia’s strategic imagination, Canberra and Jakarta work together in pursuit of shared security goals, giving Canberra greater knowledge of and ability to influence security developments in the Indonesian archipelago.

In a nightmare scenario, Indonesia is hostile, or collaborates with hostile powers, and disregards Australian interests. The reality, of course, will lie somewhere in between.

This week’s security pact, announced by Prime Minister Anthony Albanese and Indonesian President Prabowo Subianto, moves the needle slightly closer to sunlit uplands. If ratified, it would bind both sides to consult each other on security challenges, and consider what measures they could take to respond, both individually and jointly. It’s not a mutual defence pact, such as Australia has with the United States, or more recently announced with Papua New Guinea, but it’s the next best thing.

The same personal factors that delivered this win for Australia also point to its limitations.

Securing Prabowo’s agreement is a big win for the Albanese government. After all, Indonesia doesn’t do alliances and doesn’t have an agreement like this with any other country. It’s a testament to the diplomatic nous of Australia’s Foreign Minister Penny Wong that the government explicitly modelled the treaty on a 1995 agreement between President Suharto and Australia’s former prime minister Paul Keating. A signature achievement of Keating’s commitment that Australia should find its “security in Asia, not from Asia”, the agreement was abrogated only four years later after the Australian-led intervention in East Timor.

When Australia and Indonesia later agreed a replacement treaty in 2006, it was padded out with references to cooperation on a plethora of issues, but lacked the key operative provision of 1995. As US-China rivalry increased in the decades since, making Southeast Asian countries hedge their bets, most observers believed that the 1995 commitment to consult was consigned to the rubbish dump of history.

Paul Keating, after leaving office, with Suharto in Jakarta, 1998 (Agus Lolong/AFP via Getty Images)

Prabowo’s election last year, with his strong personal interest in international diplomacy, changed this dynamic. Prabowo is unafraid to overturn orthodoxies in Indonesian foreign policy and to disregard the advice of his foreign ministry. He has already done this on two notable occasions, signing a joint statement with China that contradicted established Indonesian policy on maritime claims, and recalibrating Indonesia's Middle East policy to become less reflexively pro-Palestinian and more accommodating of US diplomatic initiatives.

This agreement with Australia, explicitly modelled on the 1995 treaty, presumably also appealed to Prabowo’s own personal sense of nostalgia for Suharto’s New Order era. Prabowo recently designated Suharto, his former father-in-law, as a “national hero” and even called on Keating, who has continuously advocated the 1995 agreement as a high watermark of Australia’s relations with Indonesia, during his visit to Australia (Keating told Australian Financial Review columnist and historian James Curran last year that the operationally focused 2024 defence cooperation agreement was “OK and good for both countries, but nothing like the lock-in commitment and terms of the 1995 treaty”.)

Of course, the same personal factors that delivered this win for Australia also point to its limitations. Prabowo has stepped up ties with China and Russia, as well as Australia. He travels relentlessly, and in August 2025 attended China’s Victory Day Parade, despite protests at home. He joined the BRICS as one of his first acts as president, and in June turned down an invitation to attend the G7 in favour of a trip to Moscow. Critics in Indonesia point to the lack of coherent strategy underpinning this “hyperactive” travel schedule. This makes it hard to see the security agreement with Australia as a watershed moment, the term Albanese used.

The success and limitations of this pact reflect a larger dynamic in Australia’s engagement with its region. Australia’s relationships with its neighbours are the best they’ve ever been. Australia has had no major falling out with Indonesia for more than a decade now. An agreement like this disproves the narrative that Australia is an outsider in Asia and a satrap of the United States.

But despite this, the broader strategic trends in the Indo-Pacific region continue to go against Canberra’s interests: despite warm neighbourhood relations with Australia, Indonesia will probably continue to work more with China and even Russia. The new security agreement can’t push back changes in the regional order, but might help insulate Australia from their effect.

About the author

Susannah Patton

Susannah Patton is Director, Asia Engagement at RMIT and a Nonresident fellow at the Lowy Institute.

Topics

Indonesia Australia Defence & security