Mr Abbott is in Jakarta on the second day of a three-day trip to meet business leaders and politicians.
All Australian business leaders he met on Saturday were “very enthusiastic” about the economic prospects in the South-East Asian nation, Mr Abbott said.
“All of them were very keen to let me know Australia shouldn’t be so fixated on its now long-standing economic relationship with Japan, and more recent but very, very important relationship with China, and that we’ve neglected the vast potential of Indonesia,” h told reporters in Jakarta on Sunday.
“One of the things that should disappoint Australia is we actually have larger two-way trade with New Zealand, with four million people, than we do with Indonesia with 250 million people.”
Indonesia was Australia’s 11th largest export market in the year to June 30, 2012, official data show.
Mr Abbott said there was much work to do to build the economic relationship with Indonesia.
“For too long we have thought of Indonesia as an exotic tourist destination rather than as a potential and growing economic partner,” he said.
“As Indonesia continues to develop very strongly, as it has over the last decade, there are a lot more opportunities for Australia.”
Mr Abbott said business bosses were full of praise for the work done by Australian diplomatic and trade staff in Indonesia.
Opposition foreign affairs spokeswoman Julie Bishop said an coalition government would broaden, deepen and diversify the relationship with Jakarta.
“The coalition believes our relationship with Indonesia should be one of our highest foreign policy priorities,” she said.
Ms Bishop, opposition immigration spokesman Scott Morrison and agriculture spokesman John Cobb joined Mr Abbott in Jakarta after he left Bali, where on Friday he attended the ceremony marking the 10th anniversary of the terrorist bombings on the island.
The opposition delegation is to hold meetings on Monday with Indonesian President Susilo Bambang Yudhoyono, Foreign Minister Marty Natalegawa and government MPs.