“Combat uniforms worn by Australian soldiers are manufactured in Australia,” junior defence minister Greg Combet said in a statement on Wednesday.

Mr Combet was responding to News Limited reports that Australian soldiers would be sent to war in uniforms with camouflage material made in China as part of a new round of defence cost cutting.

“There was never a requirement to use Chinese fabric on combat clothing,” he said.

The local manufacturer - Bendigo-based Australian Defence Apparel - was sourcing the fabric from Bruck Textiles, based in Wangaratta.

The contract with the government did contain an option, allowing the manufacturer to supply extra uniforms using fabric sourced from a Chinese company.

“This option has not been exercised by the Department of Defence and it will not be exercised,” Mr Combet said.

No Australian soldier currently deployed, or in training, was wearing combat uniforms made with Chinese fabric.Sophie Mirabella has slammed the Federal Government after revelations Australian soldiers will wear uniforms made from Chinese-produced camouflage.

The cost-cutting move is a major blow for Wangaratta's Bruck Textiles, which currently produces the material.

It has also heightened national security concerns.

“This Labor Government has created a culture of exporting Australian innovation to China,” said the member for Indi.

“It is actively discriminating against domestic companies in favour of foreign enterprises and facilitating the export of taxpayer funded technology overseas.

“Taxpayers may well ask, why spend hundreds of millions of dollars on research and development when contradictory government guidelines effectively facilitate the export of such R & D?

“The Government must review relevant procurement guidelines and practices to ensure we retain an indigenous manufacturing capacity to service the safety and security needs of Australian Defence."