Defence still battling its finances

ROCKY ROAD: The latest Wikileaks have exposed problems within Australia's Defence Department.

THE Defence Department is still struggling with financial matters, its minister Stephen Smith says.

Fairfax today reported that a confidential cable from the US embassy in Canberra, obtained by the WikiLeaks whistleblower website, suggested Australia may have to sell Defence assets and delay major purchases in order to meet the department's budget.

Mr Smith said that while newspaper reports weren't always accurate, Defence was facing a raft of challenges.

``We have a very big job and a very big challenge so far as Defence finances, Defence procurement and Defence capability is concerned,'' he told reporters in Canberra.

``Recently, when I spoke to the Defence leadership group a couple of weeks ago, I made the point that a much greater effort is required from Defence to meet these challenges.''

Mr Smith praised the work of former Labor defence minister Joel Fitzgibbon, who resigned after admitting he mismanaged a conflict of interest in relation to his brother's company, saying he had put the department in a ``framework of rigour''.

Any major procurement problem was high-risk, he added.

``But I think that both Defence, the Australian government and Australia can do much better,'' Mr Smith said.

``We have made changes, we have made improvements but we have a long way to go.''

The cable quoted an unnamed senior Treasury official as saying Defence's budgeting and execution was abominable.

Mr Smith said Australian officials did talk to their overseas counterparts as a matter of course, but that no Americans had raised specific concerns about the issues raised in the cable.

The defence minister said he had spoken to US Defence Secretary Robert Gates about such challenges in a general fashion.