Until 1947 and the first Dutch ‘police action’ , the Australian government had been looking towards the continuation of Dutch sovereignty in NEI, within which the Indonesians would have substantial self-government.
In response to the deteriorating situation in Indonesia during 1948, the Labor government’s attitude to the resolution of the conflict became increasingly one of support for Indonesian sovereignty within the Netherlands-Indonesian Union proposed in the Du Bois-Critchley plan.
It had now become clear to the Dutch that Australia had taken a pro-Indonesia stand on the issue. They were clearly disappointed as this position stood in stark contrast with Australia’s initial support of the recolonialisation of NEI. However, the Australians were not alone, the Dutch became more and more isolated as the international opinion was turning against them, especially the relationship between the Netherlands and the USA had seriously deteriorated during the discussions that took place within UNGOC.
On the Australian side, this gradual evolution of support for Indonesian independence became increasingly linked with the consideration that a stable independent Indonesian state would be more secure for Australia. Generally, the Labor government appeared to have a more realistic appreciation of the strength of the nationalist movement in Indonesia than did the Liberal opposition and was more committed to the desirability of establishing future Indonesian-Australian relations on a sound initial footing.
 Australian attitudes and policies towards Indonesia 1950 to 1965 – Nancy M. Viviani