Proposed Australian defense cuts could affect everything from deployments to weapons acquisitions, Australian defense specialists say.

Canberra University National Security Institute Director Peter Leahy said the government of Labor Party Prime Minister Julia Gillard had to understand that its proposed reductions in defense constituted a strategic risk, leaving the Australian military unable to do as much.

"We will have to pull back on our diplomatic and military objectives," he said in a report in Sunday's The Australian newspaper.

Leahy's comments carry weight, as he is the former chief of army.

Australian military head Gen. David Hurley earlier this month said with 58,000 full-time defense forces personnel and 21,000 reserves, the Australian military's numbers couldn't be reduced.

"In my view there is no fat in these numbers," he told the Australian Defense Magazine conference in Canberra.

Addressing the possible transfer of furloughed military personnel to more lucrative employment in the private sector, such as the mining industry, Hurley added, ''There would be a risk to capability if that occurs.''

Australian defense worries stem from concerns after the government slashed the national defense budget by $5.5 billion over the next four years.

Australian Defense Minister Stephen Smith has refused to rule out further reductions, saying he was unwilling be pre-empt the government's upcoming budget.

The government's budget cuts have for the moment safeguarded personnel and equipment for existing foreign deployments, though analysts say they worry that, as Australia withdraws peacekeeping forces from East Timor and the Solomon Islands and prepares decrease its presence in Afghanistan, upcoming proposed budget cuts will target those forces as well.

Australia has 1,550 troops deployed with the International Security Assistance Force in Afghanistan.

Alarm bells began ringing in Australia recently when the government opposition obtained a draft of the government's forthcoming defense white paper, which justified the decreases in the country's defense budget by arguing that a return to a government budget surplus is important to underwriting Australia's defense posture.

An extract from the forthcoming document states that "a strong national economy is fundamental to a strong defense force. An economic surplus is Australia's best defense against the uncertain outlook."

As for weapons systems, the proposed defense budget cuts have already affected one of the Australian air force's pet projects, replacing both its U.S. built-McDonnell Douglas F/A-18 Hornet jet fighters and its retired General Dynamics F-111 bomber fleet with 100 U.S. built fifth-generation stealth Lockheed Martin F-35 Joint Strike Fighters, known as the F-35 Lightning ll. Analysts predict that the government's austerity program will downsize the number of F-35s that the Australian air force can purchase.

The cost of the program has steadily risen, with U.S. Air Force Lt. Gen. Chris Bogdan, the Pentagon's JSF Program Office director, remarking about cost overruns during a recent visit to Australia.

"You hear Lockheed Martin keep talking about $65 million, $67 million," he said. "Well, guess what? That's the cost back in 2004 or 2003. Who cares about that? I want to know what it costs the day I buy it."

The Australian air force places the potential F-35 costs at $90 million-$92 million per aircraft.