Indonesia capability gets a budget lifeline

There are moments in Australian policy when a small line in a budget paper carries a larger meaning. The $11.4 million over four years for the Australia–Indonesia Institute is one of those moments in the 2026–27 budget released this week. Nested inside a $33.2 million package to implement the Australia–Indonesia Treaty on Common Security, the AII funding is explicitly aimed at building on cultural exchange and grant programs, particularly Indonesian language education.

In Canberra language, that is modest. In the depleted world of Indonesia capability in Australia, it is close to oxygen.

The good is that this money did not fall from the sky. It followed a parliamentary inquiry that attracted 195 published submissions and 11 public hearings into building Asia capability. Those submissions and hearings were strikingly positive. Witness after witness made a simple case: Australia cannot keep treating its region as an optional extra. Language learning, cultural literacy, mobility, diaspora knowledge and regional expertise are not hobbies for enthusiasts. They are sovereign capabilities.

The questioning pattern tells its own story. My very rough count of the 11 Hansard PDFs found 590 questions from committee members. Chair Tim Watts asked 430, or 72.9%. Zhi Soon asked 40, Kate Chaney 36, Sam Birrell 30, Carina Garland and Renee Coffey 21 each, Joanne Ryan seven, Zoe McKenzie five, and Leon Rebello and Tracey Roberts none. That imbalance does not mean others were uninterested. Committees are structured around the chair. But it does show where the sustained energy came from. Watts, the government’s Special Envoy for Indian Ocean Affairs and a former assistant foreign minister, used the hearings to connect schools to universities, universities to business, and language policy to national interest.

For those who have spent decades watching Indonesian studies shrink, the budget allocation offers hope. It says the government has listened. It also says that, even in a fiscally tight budget, Indonesian language education can be treated as an investment in Australia’s future, not as cultural decoration.

The bad news is that this investment may not be safe. Watching Opposition leader Angus Taylor’s budget reply and then his response to questioning on ABC 7.30 signalled a different political direction: tax cuts, tighter welfare access for non-citizens, and migration cuts tied to housing supply. While he offered no numbers for the reductions, or which visa categories would be clamped, Taylor also cast Australia’s future in more inward-facing terms, especially enhancing Australia’s primary and industrial production.

There is nothing wrong with ambition, making things, or fiscal discipline. But the danger is an “Australia first” reflex that treats regional knowledge as soft, migration as a problem to be cut, and public spending as waste unless it can be seen in concrete and steel. The irony is sharp. One crucial source of Indonesian-speaking teachers is immigration. Another is the Indonesian-Australian community. Cutting migration while promising to rebuild language capability is like cutting irrigation and then complaining that the garden is dry.

There is also a historical pattern here. Conservative governments have too often turned inward, away from Australia’s most important neighbour, while Labor governments spend their time, energy and money trying to repair the damage. The pattern is not absolute; there are Coalition figures who understand Indonesia. But the institutional record is hard to ignore. Indonesian studies was built through public investment, hollowed out through market logic, and now needs rebuilding through public purpose.

The ugly is what comes next. Whenever money appears, so do opportunists. The AII has long supported people-to-people work, cultural exchange and serious Indonesia engagement. Its new funding should not become a feeding trough for organisations with thin credentials, glossy language, and little demonstrated commitment to Indonesia capability. There will be proposals that discover Indonesia only after discovering the grant round. There will be consulting-speak about capability, partnership and innovation that avoids the slow work of language learning, building trust, and engaging in genuine reciprocity.

The solution is not gatekeeping for its own sake. New actors should be welcome. Indonesia capability needs more people, not fewer. But the test should be clear: demonstrated commitment, Indonesian language education outcomes, Indonesian partner benefit, and long-term capacity building beyond one-off events. The AII should fund bridges, not brochures.

The good, then, is real. A parliamentary inquiry has given national visibility to a long-running decline underpinned by multiple interrelated factors. The budget has put money behind Indonesia capability. The bad is that the political winds could reverse that progress if fiscal restraint mutates into regional neglect. The ugly is the scramble now likely to follow.

Still, for once, those trying to rebuild Australia’s Indonesia capability can allow themselves a little optimism. The task now is to make sure this money grows teachers, students, relationships, and trust. Anything less would waste a rare chance to stop becoming strangers next door.