Australian Defence Minister Stephen Smith Sunday defended military spending cuts, saying the belt-tightening would not impact overseas operations or those with key ally the United States.

Canberra announced in May that it would slash Aus$5.5 billion (US$5.76 billion) from its defence budget as part of sweeping government cuts, deferring or scrapping jet and weapons deliveries and sacking 1,000 staff.

Smith said he had spoken with US Defense Secretary Leon Panetta on three occasions about the cuts, which do not involve cutting military personnel numbers or overseas operations, most recently last week.

"And he is absolutely convinced, as I am, that the cuts that we have made in our defence programme continue to protect our long-term capability but most importantly don't have any adverse consequences for our overseas operations," he told ABC TV.

"And don't have any adverse implications for what we are doing with the United States, our enhanced practical cooperation, whether that's (US) marines in Darwin or the prospect of enhanced aviation access to our airbases in the Northern Territory."

Australia has some 1,500 troops serving in Afghanistan as well as peacekeeping deployments in East Timor and the Solomon Islands, and is set to became a critical regional ally of the United States in the Asia-Pacific.

Some 2,500 US Marines are to be stationed in northern Australia by 2016-17 under a military deal signed with US President Barack Obama last year.

"We both share a view, which is we would both like to be spending more as far as defence is concerned, but we are both facing these economic and fiscal constraints," Smith said of his talks with Panetta.

Smith rejected the idea that Australia was "taking a free ride" on Washington when it came to defence, saying the nation continued to be in the top 13 or 14 military spenders.

"In Afghanistan for example we are the 10th largest contributor, we are the largest non-NATO contributor and we are the third-largest special forces contributor," he said.

"And we're also the country in our part of the world most active in enhancing our practical cooperation with the United States as the United States rebalances into the Pacific."

Smith said as Australian forces were drawn down in Afghanistan, and with the prospect of troops leaving the Solomon Islands and East Timor, the defence ministry would review developments in a white paper to be delivered next year.