Australian Minister for Defence, Joel Fitzgibbon (above), said the Howard government had committed to new capital projects without taking proper account of their ongoing funding requirements. -- PHOTO: AFP

Mr Fitzgibbon said the conservative administration of former prime minister John Howard had left his ministry facing a stark financial shortfall for the next decade, with a A$6 billion (S$7.8 billion) 'hole' in the budget.

'The defence budget is in a mess. And many of the capability projects we've inherited are in crisis,' he told federal parliament.

'The cost of sustaining capability has been alarmingly underestimated and underfunded.'

Mr Fitzgibbon said the Howard government, which sent troops to fight in Afghanistan and Iraq alongside US soldiers, had committed to new capital projects without taking proper account of their ongoing funding requirements.

'It's like factoring into the family budget the cost of a new car but not accounting in that same budget for the fuel, the insurance, the rego (registration of the vehicle) and the maintenance,' he said.

But Mr Fitzgibbon said the 'single biggest challenge' facing the 51,000-strong Australian Defence Force (ADF) was a shortage of skilled personnel.

The minister said the military chiefs faced a tough challenge recruiting during 'an era of almost full employment and at a time when the mining industry is booming.' He said the new Labor government of Prime Minister Kevin Rudd, which was elected in a landslide in November, was committed to putting defence finances back on track and would ensure 3.0 per cent growth a year in defence funding until 2016.

'We will fill that six-billion-dollar hole we've been left with in net personnel and operating costs,' he said. -- AFP