Defence cuts 'not an issue' with US

Defence Minister Stephen Smith has dismissed claims that the Obama administration is worried about Australia's recent defence budget cuts, saying US officials have not raised such concerns with him.

On Saturday, Fairfax reported the newly re-elected Obama administration had signalled it was unhappy with the Gillard government's defence cuts and would take it up at the annual US-Australia (AUSMIN) talks in Perth this week.

The Gillard government cut defence spending by $5.45 billion over four years in the May budget, which has previously drawn concerns from Bush administration deputy secretary of state Richard Armitage.

As Fairfax reported, Secretary of State Hillary Clinton's top Asia official, Kurt Campbell, has now suggested that Australia's spending cut would be addressed at the AUSMIN meeting.

''I've signalled that it is important. We count on Australia in so many ways. This is one of the topics that we're going to be engaging closely on,'' Dr Campbell said.

The talks will be attended by Mrs Clinton, US Defence Secretary Leon Panetta, Australia's Foreign Minister Bob Carr and Mr Smith.


Prime Minister Julia Gillard will also meet Mrs Clinton during the visit.

On Sunday, Mr Smith told ABC TV he had spoken to Australia's ambassador to the US, Kim Beazley, and the US ambassador to Australia, Jeffrey Bleich, in recent days. He said: ''[Mr Bleich] made the point, which I think he's made publicly, that Kurt Campbell believes that he's been somewhat misconstrued.''

On Sunday, Mr Bleich also played down reports that Washington was worried about cuts to Australia's defence budget.

''I know Kurt Campbell well; I know that he doesn't have worries about the budget,'' he told Sky News. ''I think the statements he made … may have been misinterpreted.''

Mr Smith said he had also spoken to Mr Panetta both before and after the defence budget cuts were announced in May and that the US understood Australia's position. ''I've made the point, and he agrees with this point publicly and privately, that we're not doing [anything] which will undermine our alliance, relationship or commitment.''

Mr Smith added that the budget cuts were not on the official agenda at the AUSMIN meeting.

He said Australia's overseas operations, which include Afghanistan, would not be effected by the budget cuts.

''We have ring-fenced our overseas operations … and we've ring-fenced important areas of capability.''

This also comes as Mr Bleich said Australia was a long way off being able to equip its navy with nuclear submarines.

Some Coalition frontbenchers are reported to have spoken to US officials about replacing the navy's diesel fleet with nuclear submarines. with AAP