Bishop defends aid cut to Indonesia

Foreign Minister Julie Bishop has defended a 40 per cent cut to Indonesia's aid budget, saying it is based on recent economic gains.

Foreign Minister Julie Bishop has defended a 40 per cent cut to Indonesia's aid budget. (AAP)

Foreign Minister Julie Bishop has seized on Indonesia's recent economic success to justify a 40 per cent cut to Australia aid.

Ms Bishop said support for Indonesia represented eight per cent of the total aid budget in 2003, grew to 13 per cent after the 2004 tsunami, and would now be normalised at nine per cent.

Indonesia's economy had almost doubled since 2004 and was now the 16th largest economy in the world, she told question time on Thursday.