Cutting military spending is both financially, realistically and politically difficult, if not impossible. Most of the money allocated to the military each year is spent before it is even allocated, meaning that demanding cuts in spending is pointless, because they would only come into effect in eighteen months or so. Few countries who want to cut defence spending actually do so, they simply don't bother increasing it and wait until inflation and economic growth catches up.
Also, Australia's military is already vastly overstretched, and despite our pulling out of Iraq, we may be getting involved in Afghanistan more so than before, which means that any savings (in money or personnel) from Iraq are nullified by a surge in Afghanistan. If we were to pull out or even cut spending to Afghanistan it would not only put our troops there at risk due to low-quality equipment and a lack of support, but also make us lose much of the political capital that we have in the international community.