Why Australia still planned against Indonesia

Why did Australian defense planning still include war with Indonesia under a Western-backed government?

Because Indonesia was the closest substantial power, making conflict a dangerous contingency worth planning for even when it was not considered likely.

Indonesia's proximity and military capacity made it a contingency Australia had to consider even under a friendly government. A war plan measures the consequences of a conflict as well as its likelihood. Britain and the United States maintained plans against one another between the world wars despite the absence of an expectation that war would occur. Britain also considered France because a large air force close to home posed a serious potential threat. The same reasoning makes Australian planning an insurance measure rather than evidence of an intention to attack.