The federal government is under pressure from charities to reverse foreign aid cuts when it hands down the mid-year budget review next week.
The coalition government has cut $11.3 billion from the aid budget since coming to power in September 2013 including a $1 billion, or 20 per cent reduction, this financial year.
Oxfam pointed to the scrapped $263 million kitty for helping disaster-prone Indonesia prepare for tsunamis, earthquakes and volcano eruptions as an example of short-sightedness.
The aid group said if it had managed to secure a tender for some of the lopped funding, it would have been able to help 20 disaster management agencies.
Work would have included accurately mapping local risks, and building protections such as walls or planting mangrove trees to hold back tsunami waves.
"While Oxfam is still undertaking some disaster risk work in communities in Indonesia, we have had to significantly scale back our operations," spokesman Alex Mathieson told AAP.
Efforts to help communities build earthquake-resistant homes, set up food banks and evacuation centres have also been hampered.
Hundreds of families were left homeless after a quake hit Alor island in East Nusa Tenggara in November, damaging more than 800 homes.
Mr Mathieson said millions of villagers still remained vulnerable to disasters and had yet to receive support to be better prepared.
Australian aid to Indonesia was slashed by 40 per cent in the May budget.
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