ACT Chief Minister Katy Gallagher

ACT Chief Minister Katy Gallagher Photo: Jay Cronan

Territory politicians are underpaid compared  with other parliaments and their pay packets will be the subject of an independent review, according to the head of the ACT Remuneration Tribunal.

The tribunal handed down its determination on MLA salaries on Wednesday, freezing the base pay for MLAs at $125,259.

But the freeze is a temporary measure while the tribunal launches a review of MLA salaries and allowances to determine if they are too far behind politicians in other states and territories.

Chief Minister Katy Gallagher had called for a pay freeze for MLAs in 2013-14 due to a tough ACT economy and the ACT government’s low pay offer to the territory’s public servants.

Ms Gallagher said she was pleased that Wednesday’s decision was in line with that recommendation, but the public service union rejected the request for a pay freeze as a "stunt".

The Chief Minister’s pay packet was set at $263,000 in 2012-13, while deputy leader Andrew Barr earned slightly over $225,000.

While the pay freeze is in force, Opposition Leader Jeremy Hanson will receive about $213,000.

Remuneration tribunal chairwoman Anne Cahill Lambert said the freeze was a short-term measure to allow an independent consultant to do a "root-and-branch review" of MLAs’ salaries, entitlements and allowances.

In particular, the allowances received by territory politicians fell well short of those offered by other parliaments, Ms Cahill Lambert said.

"We think our MLAs are underdone compared to others around Australia," she said.

 "That doesn’t mean that when we do the review we’re going to give them what everyone else gets."

Ms Cahill Lambert said the lack of an upper house in the ACT meant that territory MLAs had "a much more important influence on the outcome than one member elsewhere in Australia".

She said the review, to be completed by October, would also consider the Assembly’s calls for a resettlement allowance for politicians who lose their seat at an election and have to find new work.

"I’m conscious that there’s never really a good time to increase a politician’s pay," Ms Cahill Lambert said. "I think if you want people to continue to rise for political office you need to be fair. Our MLAs are paid well below the band one in the public service. Is that fair?"

Wednesday’s determination included a 2 per cent pay rise for the territory’s heads of service, directors-general and executives.

Unions rejected the government’s 2per cent pay offer for four years to the territory’s 20,000 public servants.

The Community and Public Sector Union said on Wednesday that Ms Gallagher’s call for a pay freeze for MLAs was "a stunt".

"I’m not having a bar of that," ACT branch secretary Vince McDevitt said. "If our people were on wages like that we’d probably entertain the idea of a pay freeze too."