Australia was recently exposed in conducting in illegal surveillance on Indonesian officials, including a wiretap on the Indonesian President and his wife. As we have seen in the US, if your country is exposed for engaging in unconstitutional surveillance, it is the international norm to make a formal apology. Obama did this with Germany a month or so back.
It turns out that Tony Abbott, the Australian PM, neglected to give such an apology as he stated "all governments gather information". This has caused outrage in Indonesia and diplomatic relations between the two states have hit its lowest since the 1999 East Timor crisis. Had Abbott apoligised, yes, there would still be friction between the two states, but much less severe than it is now. Indonesia are furious at Australia as Abbott's refusal came across as arrogant and egocentric. People in Indonesia have actually burnt the Australian flag in disapproval.
Do you think this was the right or wrong thing to do? I think Abbott is correct in the sense that all governments do, indeed, gather information. Indonesia have been busted spying on Australia, as well, but an apology, even if it was founded on deception and emptiness, would have simply been the right thing to do. Now because of Abbott's snobbiness, Indonesia are refusing to stop boats and support Australia's asylum policy. This means more unneeded and easily avoidable mess for Australia. It has also severely hindered our relations with our closest neighbour in the region.
I do sort of understand Abbott's intents. He is not backing down. He is simply stating the truth and going against the international 'norms' and laws, but sometimes you need to suck it up and just apologise to avoid a mess.