Visa free travel is given under reciprocal agreement and Australia does not agree on the reciprocity, foreign office spokesman Arrmanatha Nasir said here on Friday.
Foreign Minister Retno LP Marsudi told her Australian counterpart Julie Bishop the reason for not giving Australia the same treatment when they had a brief meeting in Sydney airport.
Bishop said her government could understand the decision of the Indonesian government.
Early this month, Coordinating Minister for Maritime Affairs Rizal Ramli said visitors for 47 more countries will be offered visa free travel to Indonesia in October.
Rizal Ramli said the offer is made effective in October to coincide with the year end holidays.
In October with the addition of 47 more countries, tourists and other travelers from 92 countries would no longer need visa for short term visit to Indonesia.
Rizal Ramli said visa free travel is most effective in drawing visitors to the country.
The government set a target to chalk up 20 million foreign tourists to visit the country in 2019 , and earning target from the tourism sector is set at U.S.$20 billion a year from normally U.S.$10 billion.
Malaysia offers visa-free travel to 164 countries and Thailand offers it to 56 countries.
The two neighboring countries attract far larger number of foreign tourists than Indonesia each year.
Earlier Tourism Minister Arief Yahya said the government was hoping that an estimated 10 million foreign tourists would spend at least $1 billion this year.
Visa-free travel will only be available through five international airports in Jakarta, Medan, Batam, Bali and Surabaya.(*)