Now that the tsunami relief money for Aceh is on the table, there is a tussle looming over how to spend it. The rosy bilateral glow of January – when Australia made its $1 billion pledge – was always going to dim when it came to the much tougher task of hammering out the details. That challenge begins next week in Canberra when Australian and Indonesian ministers meet for the first time over the tsunami aid package. And the differences are already apparent.

Indonesia is, understandably, nervous about how the aid effort is unfolding. Conditions are more difficult than could ever have been foreseen. As well as claiming the lives of hundreds of thousands, the tsunami wiped out much of the infrastructure and staff of local government, the very network upon which recovery depends. Then there is the money. So much of it. Any rush of cash into a poor region triggers localised hyper-inflation, like that which dogged the reconstruction of East Timor. It is not surprising, then, that Jakarta is bemoaning the way foreign aid donors are poaching the very public servants it needs to maintain its programs.

The head of Indonesia's National Planning Agency, Sri Mulyani Indrawati, fears history will judge her Government harshly, especially if large sums of money are lost to poor co-ordination. Friction is also building between international aid agencies as they compete for plum projects such as roads and schools. Dr Indrawati wants more funds channelled through Indonesia's national budget.

The Aceh aid effort is a crucial political test for President Susilo Bambang Yudhoyono and his pledge to combat endemic corruption, especially rife in the Aceh's civil war zone. Domestically, Dr Yudhoyono needs to be seen to be leading the relief effort in Aceh, not flailing around as his public servants desert the bureaucracy for better-paid jobs funded by foreign aid donors.

But there are sound longstanding reasons foreign governments do not hand over chunks of cash to plug the national budgets of any country. Experience shows that while foreign aid intended for health, for example, may indeed go to health, it can, at the same time, free up funds for, say, arms purchases.

Thus the aid produces no net benefit. There is no reason to doubt Dr Yudhoyono's commitment to transparency and accountability in Aceh. But Indonesia ranks as one of the world's most corrupt nations. The Australian Government must continue to insist next week that the entire $1 billion aid package remains under joint scrutiny. Canberra can, however, afford to be sympathetic and should commit itself to building Indonesian expertise, not just sending in Australian officials.

There is room, too, for some flexibility about where Australia's money goes. Indonesia is a very poor, populous nation. Resentment could be fostered if Aceh gets a Rolls-Royce health system and other impoverished communities are left to struggle. But conditions in Aceh are so daunting that no donor should be rushing to spend its money too quickly, nor pump it into the Indonesian budget instead. There is only one road to recovery in Aceh; it is long, slow and very bumpy.