The Proteas can relinquish top spot if they lose to Australia but Smith is confident that his squad can respond to the challenge they face from the hosts.
"Touring Australia is always tough and the battle for number one probably makes it an even more anticipated series," said Smith. "We need to play good cricket if we are going to retain our number one Test ranking.
"We have the self-confidence of knowing that we have the players that can step up when needed, especially after beating England away from home."
The first Test begins on Friday in Brisbane.