Canberra: Key US ally Australia slashed $5.57 billion from its defence budget on Monday as part of sweeping cuts, deferring or scrapping jet and weapons deliveries and sacking 1,000 staff.

Defence saw the largest cuts of any sector in the 2012-13 budget, with $5.5 billion in savings scheduled over the next four years which the government promised would have "no adverse impact on operations" overseas.

"The provision of equipment to defence personnel on operations will not be adversely affected and there will be no adverse impact on the number of military personnel in the Australian defence force," said Defence Minister Stephen Smith.

"The decisions... have all been carefully designed to protect our servicemen and women and our defence operations, and to minimise the impact on core capabilities."

 Australia has some 1,500 troops serving in Afghanistan as well as peacekeeping deployments in East Timor and the Solomon Islands, and it is set to host a United States military presence in the Asia-Pacific.

Some 2,500 US Marines are to be stationed in northern Australia by 2016-17 under a deal inked with US President Barack Obama last year which will see a major expansion of military ties between the two nations.


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