"You guys don't really actually have a plan, do you? You have no idea," independent senator Jacqui Lambie told senior Air Force officials at a federal budget inquiry on Wednesday.
"It's really embarrassing for me who wore that uniform."
The Royal Australia Air Force will phase out C-27J Spartan planes just 11 years after the first one landed in Australia, but it is yet to disclose a detailed replacement plan.
The Spartans - which are small enough to land on short, soft runways but can carry troops and equipment - is being phased out just over a decade after they were first brought in.
The fleet of 10 cost Australia about $1.4 billion, with the first plane arriving in early 2015.
But Chief of Air Force Air Marshal Stephen Chappell told the ABC in May that circumstances had changed "drastically" since the decision to acquire the C-27Js, such as relationship shifts in the Pacific.
Commercial planes are now "part of the option set" the Air Force will consider when replacing the Spartans, Air Marshal Chappell said on Wednesday.
"There will not be a capacity gap (during the phase out). How we will fill that capacity will be a combination of C-27s over at least the next couple of years ... and maybe one or more (commercial) option," he said.
The defence force will shuffle $5 billion from the $425 billion Integrated Investment Program, designed to increase military capability to 2036.
Some of that figure will account for the phasing out of Spartans, but opposition defence spokesman James Paterson estimated that would only account for a maximum of $1 billion, leaving a $4 billion shortfall.
"In the figures I have in front of me, that's a reasonable estimate," Air Marshal Chappell said.
Defence officials were tight-lipped in the Senate inquiry when asked about where the rest of the savings would be made.
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