"We are talking here of an offensive capability, no longer defensive capability, and we have to ask ourselves against whom is this long-range cruise missile being directed," said Indonesian foreign ministry spokesman Marty Natalegawa.
Australian Defence Minister Robert Hill announced earlier that his country planned to acquire air-to-surface missiles able to destroy air and sea targets up to 400 kilometres (250 miles) away.
The range of the new missiles, which will begin coming into service in 2007, would be up to four times the range of any missile now available to the air force, The Australian newspaper reported.
The plan comes amid mixed relations with neighbouring Indonesia, widely perceived among the Australian public as the country's biggest security threat.
"The Australian government I believe has been very pronounced, very forceful in expressing their opposition to missile technology proliferation," Natalegawa said.
"We'll be looking at this very carefully and we'd like to be enlightened against whom such an offensive capability is being directed," he said.
A study by an Australian think-tank revealed Wednesday that the Australian public ranks Indonesia as the country's greatest military threat.
Relations with Indonesia have been rocky since Australia in 1999 led international intervention in East Timor following a violence-marred vote for independence from Jakarta.