JULIA Gillard has hit back angrily at Tony Abbott's ''new low in negativity'' after the Opposition Leader criticised the government's budget cuts to defence during his visit to Washington.
''He has gone overseas, talked our nation's national security credentials down, having voted for the defence budget he is now criticising,'' she said.
Appearing at the Heritage Foundation, the US' most prominent conservative think tank, Mr Abbott was asked if he was worried about Australia's cuts to its defence budget.
He said he believed savings were possible in this area, but ''it was irresponsible to save money in defence in a way that compromises your military capability, given that Australia's military capabilities are not vast''.
''As a result of defence cuts in the recent budget, Australia's defence spending as a percentage of gross domestic product is now at the lowest level since - wait for it - 1938. So that is quite a concern,'' said Mr Abbott, who is in the US for the Australian American leadership dialogue.
In his speech he said: ''We are more than allies, we're family. Around the world we seek no privileges, ask no favours, crave no territory.''
The US continued to have the world's largest economy and remained the nation the world turned to in times of trouble or disaster. ''What's remarkable is that, right now, perhaps for the first time, the world appears to have more confidence in America than America has in itself,'' he said. Members of the Democrat administration and senior Republicans have voiced concern at Australia's defence budget and those of NATO member nations.
The budget cuts reduce the defence budget from 1.8 per cent of GDP to 1.56 per cent.
Richard Armitage, deputy secretary of state in the Bush administration, this week described the Australian defence budget as ''inadequate''.
Last week the top US Pacific commander, Admiral Samuel Locklear, warned ''your defence is not something you can turn on and off with a switch''.
But Ms Gillard said the first time Australia's defence budget ever topped $100 billion was under this government ''and it is still over $100 billion''.
She had spoken to Admiral Locklear and ''he said he understands nations have to make their own decisions about defence expenditure, and his nation, the US, is taking some decisions, too, that are very tough in its budget circumstances''.
In an interview with Sky TV, Mr Abbott praised former PM Kevin Rudd, who is also attending the dialogue. ''I have to say the contributions that I've heard from Kevin Rudd have been highly sophisticated and very much to the point,'' he said.
Assistant Treasurer David Bradbury said it was ''extraordinary that the man who would be the alternative prime minister is out there trashing Australia's national security credentials, and doing it to an international audience''.
He said the praise of Mr Rudd was ''a bit of mischief from Mr Abbott''.