Tony Abbott has backed a decision to reduce allowances paid to Australian troops in Afghanistan and the Middle East.
The prime minister says Australia's involvement in strife-torn Afghanistan has changed and Defence's decision is therefore appropriate.
Troops were routinely operating in the field and regularly engaged in combat but have now moved into training and support jobs, he said.
"I think it's a perfectly reasonable decision," he told Macquarie Radio in Sydney.
"It's the sort of decision which is made routinely by the military at the close of any campaign."
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Defence has moved to wind back allowances paid to about 400 troops bow in Afghanistan and 800 in Persian Gulf bases and aboard the Australian navy warship operating in the Middle East.
The move will save an estimated $20 million.
Field allowance, intended to compensate for arduous living conditions and previously paid to all personnel at the rate of $33-$56 tax-free per day, will now go only to those operating in "field-like conditions".
But most in the Middle East and Afghanistan now live in air-conditioned accommodation and eat at established dining facilities.
Defence is also reviewing separate campaign allowances, previously paid at $200 per day tax-free for those in Afghanistan and $125 per day tax-free for those in the Middle East.
It is also reclassifying its operations.
Operation Slipper, which previously covered the entire Middle East, now becomes Operations Slipper (just Afghanistan), Manitou (naval operations) and Accordion (Middle East bases).
Slipper will continue to be classified as warlike service but Manitou and Accordion will be classed as non-warlike.
