Indonesia was a Dutch colony that was occupied by the Japanese during World War II. The Dutch tried to regain control by force when the war ended. Australian unions, a few religious leaders and other members of the public responded at this vital moment by providing decisive support for the Indonesian independence cause.

The Australian Waterside Workers' Federation (WWF) prevented Dutch ships laden with troops, munitions, and other supplies from leaving Australian ports. Starting in Brisbane, the embargo soon attracted wide support from workers in other major Australian ports including Sydney, Melbourne, and Adelaide. The WWF began by refusing to load Dutch cargoes and repair Dutch ships, and later boycotted all Dutch transport, stores, and depots ashore. The embargo continued until 1948. Thirty-one Australian trade unions and four Asian trade unions directly immobilized 559 ships that were supposed to supply the Dutch effort. As late as March 1946, for example, 1000 Dutch trucks intended for shipment to Indonesia still remained in Australia. Australian policymakers sympathized with Indonesia's anti-colonial nationalist cause but they also wanted to contain the growth of a communist movement that was heavily involved in the fight for independence.

The secretary of Australia's external affairs department warned that if Indonesia's republicans were unsuccessful, "a Left Wing militant movement [would] soon gather strength throughout Indonesia." This would result in Indonesia being "lost to a potentially hostile Republican Left Wing movement. Commercially and in every other way this should be avoided at all costs."1 The Australian government agreed to charter ships (the Esperance Bay and the Manoora) to take nearly 4000 Indonesian opponents of the Dutch to republican-held territory in Java. Australian trade unions and other organizations pressured the Australian government to prevent the British, at the behest of the Dutch, from trying to remove the most determined Indonesian nationalists from the Esperance Bay before they could reach safety in Java.

There were many contacts between Indonesians and Australians during World War II, including several marriages. Religious figures and academics were active in the Australia-Indonesia Association, which was formed on 3 July 1945 at a public meeting in Sydney. The Anglican Bishop of Sydney, George Cranswick, the University of Sydney anthropologist Adolphus Elkin, the trade union leader Guy Anderson and other notables served on its executive. The Australian public supported Indonesia's anti-colonial struggle, as did many Australian soldiers who had served in the Netherlands East Indies during World War II.

The Australian government eventually referred the dispute between the Indonesian nationalists and the Dutch to the United Nations Security Council as a 'breach of the peace' under Article 39 of the UN Charter. Indonesia's leaders greatly appreciated this support, even nominating Australia as their representative on the United Nations Good Offices Committee. Indonesia's foreign minister, Dr Subandrio, would later describe Australia as the 'midwife' of the Indonesian Republic. Indonesia's independence came about on 27 December 1949.

1 J. Burton, Personal Letter to F.K.Officer, 27 August 1948, 'Documents on Australian Foreign Policy 1937-49', Vol XIII, Indonesia, 1948, p.270.