Barnaby Joyce says it’s in the two countries’ interests to co-operate closely after it appeared Indonesia softened its stance towards Australia.
The Indonesian military has appeared to backtrack on a claim it was suspending military ties with Australia after one of its officers found offensive training materials at an Australian Special Forces base late last year.
“I believe this issue will quickly be put aside because it’s in both our interests to work together,” Deputy Prime Minister Joyce told reporters at Parliament House.
“The terrorists that come into Indonesia are the same ones that are going to come into Australia.”
On Thursday, Indonesia's security minister said the military had not suspended all cooperation with Australia, contradicting a military spokesman who said on Wednesday "all forms of cooperation" had been suspended.
"Steps have been taken by the military chief to suspend a language-training programme in Australia," chief security minister Wiranto said in a statement.
"This means it was not a cancellation of all co-operation, as was reported in a lot of media recently."
Indonesian President Joko Widodo said earlier on Thursday relations with Australia remained good despite the Indonesian military announcing a day earlier that all military co-operation had been suspended.
"I think our relations with Australia remain in a good condition. The problem has to be clarified first at the operational level so the situation will not heat up," Widodo told reporters.
In a statement, Australian Prime Minister Malcolm Turnbull said he welcomes the Indonesian President's "desire to resolve quickly current issues impacting on elements of defence co-operation".
The Indonesian military suspended ties with their Australian counterparts for "technical reasons" after offensive material was found by an Indonesian officer at a training base in Perth.
According to Indonesia's Military Chief Gatot Nurmantyo the materials not only referenced West Papua, but also East Timor.
"The curriculum and lessons, have always been the same. It is hurting (our feelings), I don't want to elaborate further as the offending teaching materials have been in place for a long time," he told reporters.
The suspension was triggered after an Indonesian special forces trainer teaching language studies at a Perth military academy was offended by material being used by an Australian student late last year.
AAP understands the material concerned information taken from the online encyclopedia website Wikipedia about the late General Sarwo Edhie Wibowo, who is considered a national hero in Indonesia.
Wibowo was involved in leading the purge of communists in Indonesia in 1965.
Before West Papua became Indonesian territory, Wibowo oversaw the 1969 referendum dubbed the "An Act of Free Choice", which has since been widely condemned as a sham when only 1025 people were selected to vote.
The Indonesian trainer was also offended by a poster that ridiculed Indonesia's founding ideology, Pancasila.
Pancasila stipulates Indonesia's five principles of religion, civilised humanity, unity, democracy and social justice.
Defence Minister Marise Payne said on Thursday she has spoken to the Indonesian government.
"We have indicated our regret that this occurred and that offence was taken," Senator Payne said.
"We should endeavour to ensure that the material we use is culturally appropriate ... and not gratuitous."
Senator Payne said the matter is being dealt with in a constructive and mature way, and she is expecting her Indonesian ministerial counterpart to visit in February.
Since the suspension started, a visit by a group of Indonesian military staff college students has been cancelled and Indonesia's participation in an upcoming naval exercise is in doubt.
Australian Defence Association spokesman Neil James believes there are deeper reasons for the breakdown of military co-operation and described the saga as a "storm in a tea cup".
"The new Indonesia chief of defence force equivalent is perhaps not as pro-Australian as some his predecessors," he told AAP.
"There's an unfortunate tendency in Australia, particularly in academic and diplomatic circles, every time there is a dispute between Australia and Indonesia, there is an instinctive reaction by many ... to say 'it must be our fault'. But just as often it's not our fault."
Indonesia's military chief General Gatot Nurmantyo has been quoted by the ABC as saying he stopped sending his best soldiers for training in Australia out of fears they would be recruited as agents.
Senator Payne has denied the claim.
The issue is expected to be well and truly ironed out before President Widodo's rescheduled visit to Australia in the coming months.
He abruptly cancelled his trip late last year after a protest in Jakarta spiralled into violence, with up to 150,000 demonstrators demanding the jailing of the city's Christian governor for insulting Islam.
No new date has been officially set but planning is well under way.
-With Reuters
