There was a shortage of more than 4300 people - almost seven per cent - as of January 1, Chief of the ADF Angus Campbell told a parliamentary hearing.
Hiring rates are below the level required to maintain the force, the general said on Wednesday.
ADF chief Angus Campbell says a tight labour market is making recruitment more difficult. (Lukas Coch/AAP PHOTOS)
"Defence is addressing retention and recruitment as a priority," he said.
A tight labour market made the task more difficult.
On the plus side, the number of people leaving the force dropped from a high of almost 12 per cent to 10 per cent in February.
The size of the air force was at a two-decade high, the Australian Defence Force Academy just started one of its largest intakes of trainee officers and the army graduated its largest cohort from the military college last year, General Campbell said.
Liberal frontbencher Simon Birmingham pursued questions about the Department of Defence's culture following reports of tensions between minister Richard Marles and top brass.
The issue traces back to a tense meeting between the minister, department secretary and defence chief.
"There won't be any Valentine's Day cards flowing between the minister for defence and his department, though, will there?" Senator Birmingham said.
Defence Secretary Greg Moriarty said it wasn't unusual for a minister to make clear their expectations of senior staff.
"I've had many interactions with a number of ministers in this portfolio and it's routine and, in fact, appropriate for them to have these engagements with the department," he said.
"The minister also set out areas where he was very pleased with the performance of the department."
Officials were also pressed on why the defence minister hasn't released a review into the navy's surface fleet, which was announced in April 2023 and received by the government four months later.
Senator Birmingham questioned why there was a delay in the release despite the minister saying it would be short and sharp.
Labor senator Jenny McAllister, representing the defence minister at the Senate hearing, said the government was considering the recommendations.
Previous reviews took years to work through, department Deputy Secretary Tom Hamilton said.
"The review of the surface fleet was undertaken very quickly, but it was a very, very thorough process," he said.
"It is entirely appropriate that the government take the time it needs to work through such issues of fundamental importance to the Australian Defence Force and to Australia's defence policy settings."
The review is expected to be released next week.
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