In a lengthy speech to defence experts in Canberra on Tuesday night, Mr Smith promised his high-profile campaign to drag defence under his control would continue.
Among a host of scandals in 2011 has been the massive underspending of the department's nearly $30 billion budget.
Mr Smith ordered a review and in the speech said the findings of it would be acted on without waiting for the budget.
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"I propose to act on this advice upon receipt, and not simply wait for the 2012/13 budget process," Mr Smith said.
"The return of defence underspend to the budget reinforces the message that we must get the estimate and the estimation process right."
He went on to describe the review as a "comprehensive stocktake and health check" of the defence budget system.
"It will challenge budgeting processes and methods that have been part of defence's budgeting system for years."
Mr Smith also reasserted the need for close departmental and "personal" responsibility inside defence.
Last week the government released another report, the long-awaited Rizzo Report of the major failures with navy.
These problems were capped in February when none of the navy's three vital heavy-lifting ships were able to help respond to Cyclone Yasi.
Mr Smith closed his speech by talking about the wide-ranging review into where defence will place its major assets heading into the Asia-Pacific century.
"It is appropriate to consider whether the Australian Defence Force is appropriately geographically positioned to respond in a timely way to Australia's strategic and security demands," he said.
This so-called defence force posture review is due by March 2012.
"We will succeed in this because we are determined to do so," Mr Smith said.
