Australia's "megaphone" diplomacy and lack of consultation with Indonesia over policies like boat turnbacks has caused widespread unhappiness in Jakarta and harmed relations, the head of the peak body representing Australian businesses operating there says.
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The unusually blunt assessment came as Indonesia dramatically cut its permits for live cattle exports from Australia for the three months ending September to 50,000 animals, significantly fewer than the 200,000 expected and the 250,000 quota for the quarter just gone.
Agriculture Minister Barnaby Joyce described the decision as "disappointing" and vowed to find alternative markets. Senior government ministers denied the decision was linked to the tense diplomatic relations between the two nations.
However, Debnath Guharoy, president of the Australia Indonesia Business Council, said there was little doubt Australia was unpopular with the Indonesian government at the moment.
"In my communications with Indonesian agencies and government departments, the overwhelming sentiment I am feeling is they are unhappy with Australia. They are not happy with the way we are conducting our diplomacy. The megaphone is not working," he said.
"The truth is, in terms of the business relationship, it doesn't help. The fact that we make decisions unilaterally without consultation and tell them to just deal with the consequences, we just have to conduct our diplomacy better than we have been."
Mr Guharoy said the issue of boat turnbacks "was just the most recent example" of the kind of diplomacy that is upsetting Indonesia.
"Perhaps, it's the biggest [example]," he added.
The Abbott government has turned back numerous boats laden with asylum seekers and encroached on Indonesia's maritime territory in the process. Most recently, allegations emerged that Australian spies were bribing people smugglers to return to Indonesia, further antagonising and astonishing Jakarta.
The boat turnbacks came on top of the controversy about Australian eavesdropping on the former Indonesian president Susilo Bambang Yudhoyono and his wife under Labor, as well as the execution of the Bali nine drug traffickers Andrew Chan and Myuran Sukumaran.
Foreign Minister Julie Bishop said she had been "assured" the permit cuts were a trade issue, rejecting assertions by Labor that there may be a link to the diplomatic troubles.
"It's not in relation to the overall Australia-Indonesia relationship, which is very strong and very good as I've said on a number of occasions," she said.
But Mr Guharoy said it was time to speak plainly about the state of the relationship, and the poor diplomacy from Australia that was undermining it.
"I've been urged by our membership to man up and tell the truth. I believe it's a service to the nation to tell the truth about what's happening."
Just weeks ago, former Indonesian foreign minister Marty Natalegawa said relations between Australia and Indonesia appeared to be at their lowest point.
Mr Joyce told reporters in Perth on Tuesday that he hoped he could "rectify" the situation "soon".
"Obviously I would like the opportunity as soon as I can to meet up with the respective ministers responsible in Indonesia," he said.
Mr Joyce said the live cattle trade to Indonesia was "incredibly important" and it was up to him to find alternative markets.
Northern Territory farmers are now scrambling to find a market for about 150,000 head of cattle. Northern Territory Cattlemen's Association Tracey Hayes said that there were some options but "it's not an overnight scenario".
The opposition also pointed to Mr Joyce's split with cabinet over the government's approval of the Shenhua coal mine in his electorate.
"The situation in Indonesia is a shocking development but should not have been entirely unexpected if Minister Joyce was across his brief and not distracted by his internal wars with cabinet," agriculture spokesman Joel Fitzgibbon said.
Indonesian beef importers told Fairfax Media that the permit cut reflected a belief, likely mistaken, in the Indonesian government that it had enough local cattle to meet demand. Indonesia has long sought agricultural self-sufficiency.
However, in the past, Indonesia has scrambled to increase live cattle import permits after they misjudged local supply and prices rose sharply, angering consumers.
Mr Guharoy lamented that the potential to greatly expand the economic relationship between the two countries was not being realised.
"We are neighbours but when you look at our economies, we are not really competitors in a business sense," he said. "There is a great logic for us to co-operate together in Asia. But we have missed that opportunity time and time again."
