Key Highlights–
- Australia and Indonesia agree in principle to a landmark defence treaty amid rising tensions with China.
- Pact to establish regular leader-level security consultations and joint threat responses.
- Move signals Jakarta’s delicate balancing between ASEAN neutrality and Western alliances.
Australia and Indonesia are on the verge of signing a “watershed” defence treaty that both governments say will redefine their security partnership in the Indo-Pacific.
A “Watershed” Defence Pact in the Making
The agreement, approved by Australian Prime Minister Anthony Albanese and Indonesian President Prabowo Subianto during Prabowo’s first state visit to Canberra, will be formally signed in January 2026, according to Reuters.
Albanese said the pact commits both nations to regular consultations at the leader and ministerial levels on security issues and to work together when either nation’s security is under threat. “This treaty is a recognition from both our nations that the best way to secure peace and stability is by acting together,” Albanese told reporters in Canberra.
Prabowo echoed that sentiment, invoking a cultural proverb: “In times of emergency, it is our neighbour that will help us.”
Strengthening Old Foundations
While details of the new treaty have not been released, Australian media reports suggest it builds upon the 1995 Keating–Soeharto Security Agreement, which was later annulled after Australia’s involvement in the East Timor peacekeeping mission. That operation strained relations between the neighbours, leading to the pact’s collapse.
Since East Timor’s independence in 2002, Canberra and Jakarta have rebuilt trust through key frameworks such as the 2006 Lombok Treaty and the 2024 Defence Cooperation Agreement, each of which has strengthened military exchanges, intelligence sharing, and maritime coordination.
The new treaty, Albanese said, expands those commitments, allowing both nations to consult and consider joint or individual measures should either side face a security threat. “It signals a new era in the Australia–Indonesia relationship,” he added.
Shared Concerns Over China’s Growing Reach
The agreement comes at a time of intensifying regional competition, particularly amid China’s expanding influence across the South China Sea and Pacific Islands. Both Australia and Indonesia have long walked a tightrope between economic interdependence with Beijing and strategic caution about its assertiveness.
According to ABC News, former Australian Prime Minister Paul Keating revealed that even in the 1990s, he and then-President Soeharto were concerned about China’s military trajectory. “Soeharto and my arrangement was essentially a mutual defence pact,” Keating said. “Because a major threat to one, given the geography, necessarily impacts the other.”
Today, those concerns have only deepened. China remains Indonesia’s largest trading partner, but its growing naval activity around the Natuna Islands, part of Indonesia’s exclusive economic zone, has heightened Jakarta’s vigilance. For Australia, Beijing’s criticism of AUKUS and influence in the Pacific continue to shape its defence priorities.
A Balancing Act Between ASEAN and AUKUS
Experts say the upcoming treaty underscores Jakarta’s diplomatic balancing act, strengthening defence ties with Western powers while preserving ASEAN centrality and non-alignment.
By aligning with Australia, a key AUKUS member, Indonesia signals readiness to deepen defence cooperation without fully committing to the Western bloc. The move could also position it as a bridge between ASEAN and AUKUS, fostering regional dialogue at a time when Indo-Pacific geopolitics is increasingly polarized.
“The treaty demonstrates Jakarta’s pragmatic diplomacy, hedging against security risks while maintaining its independent posture,” said one regional analyst cited by Reuters.
The Road Ahead for Canberra and Jakarta
For both nations, the next phase involves implementation, from joint training programs and maritime surveillance to enhanced intelligence coordination. Defence analysts note that deeper cooperation could also open doors to cybersecurity collaboration, the sharing of defence technology and counterterrorism initiatives across Southeast Asia.
As the Indo-Pacific becomes the frontline of strategic rivalry, the Australia–Indonesia treaty could serve as a model for regional partnerships based on mutual respect and shared security, rather than zero-sum blocs.
“This partnership shows that in an increasingly uncertain world, collaboration, not competition, will define regional peace,” Albanese said.
