Defence Minister Jonathan Coleman has accused Labour's defence spokesperson Phil Goff of misleading the public over defence spending cuts.
Mr Goff has released confidential reports to a Parliamentary select committee raising concerns about the capability of the Defence Force to meet future deployments.
Dr Coleman said Mr Goff is creating a false picture of the state of the Defence Force.
The minister says the information has been leaked selectively and is out of date.
Dr Coleman said the number of people leaving the Defence Force is now below its long-term average and morale has been improving for the past 21 months.
Defence told a Parliamentary committee on Tuesday it could take up to seven years to repair the damage caused by Budget cuts and get the force back to full strength.
In 2010, the Government announced the Force would be expected to find $350 million per year in savings. Hundreds of redundancies and resignations resulted.
The Defence Force's annual report says a lack of skilled soldiers means there is a risk that Defence will not be able to deploy troops.
The report exposes skill shortages in the Army and also warns a Navy ship and new Air Force helicopters cannot be properly crewed.
The Government has since slowed the process because of the effect the cuts were having.
Labour says the Minister of Defence needs to take responsibility for the damage his Government's cuts have caused.