Defence force chief General David Hurley has given a Senate committee an upbeat assessment of progress in Afghanistan, declaring local security forces more capable than ever and its people now more concerned about basic services than security.

Based on Australian assessments, transition to Afghan security responsibility in Oruzgan province would be completed and the majority of Australian personnel withdrawn by the end of this year, he said.

"In December I would think," General Hurley told an estimates hearing in Canberra on Wednesday.

The Australian mission had changed but forces remained ready to conduct combat operations if required, while special forces still conducted missions targeting insurgent leaders.

The al-Qaeda threat in Afghanistan had been "confronted, reduced and largely neutralised".

The Taliban remained resilient but their message now had less resonance with Afghan people than ever before, General Hurley said.

"Regular nationwide surveys show the majority of Afghans, including the southern Pashtuns, do not want the Taliban to return to power.

"The Taliban are now increasingly fighting Afghans on Afghan soil and the senior insurgent leadership now operates largely from outside Afghanistan."

Insurgents retained the capacity to conduct occasional spectacular attacks but their military options, beyond terror attacks and use of improvised explosive devices, were limited.

Afghan security forces were now leading more than 80 per cent of operations countrywide.

"The 2013 campaign plan is Afghan-planned and will be Afghan-executed," General Hurley said, adding the Afghan National Security Forces were able to confront and defeat insurgents increasingly in its own right.

Throughout 2012, nationwide surveys identified that security was no longer the average Afghan's primary concern.

Basic services, such as power and roads, employment opportunities and corruption were now the top concerns.

"It is clear that the path ahead will require an Afgan political solution which can only be designed, agreed and implemented by Afghans and on an Afghan timeline," General Hurley said.