The Australian Defence Force says its below-inflation pay offer to tens of thousands of members will cost the Abbott government $634 million and should be supported before the existing arrangement expires, because back pay is not an option.
In a hearing at the Defence Force Remuneration Tribunal on Wednesday, the ADF's advocate said the proposed pay rise would be given in a time of financial constraints and unpredictable world events.
It is less than a fortnight since Australian aircraft were sent to bomb Islamic State targets in Iraq.
The tribunal reserved its decision and it is not known when it will make its call, although it is expected before the existing arrangement expiresin less than three weeks.
ADF Queen's counsel Richard Kenzie said the 4.5 per cent pay increase over three years – or 1.5 per cent a year – should be approved, because it was the best deal that could be reached after "protracted" negotiations with the Commonwealth.
"We did not achieve an agreement [with the Commonwealth] until last week," Mr Kenzie said.
He put forward previous tribunal decisions to show that if the ADF's proposal was not accepted by the time the current arrangement expired in November, members would be in a position where they would not receive back pay.
He said there was the ability for the ADF to return to the tribunal after the proposed arrangement was in place.
"It's no secret the ADF would have liked to have had an offer which involved higher increases," Mr Kenzie said.
Later, when noting the extensive media coverage, he said "one has to keep the emotion out of this".
Australian Defence Force personnel have described the government's pay offer as "an outrage", "a disgrace" and "a joke".
Under the Defence Act, ADF members have no ability to bargain with their employer.
As of Tuesday night, the Defence Force Welfare Association had received 11,500 responses to its survey about the proposed arrangement and more than 90 per cent were dissatisfied.
During proceedings, tribunal president Anne Harrison said the tribunal had no power to arbitrate over details in the proposed arrangement.
The ADF-Commonwealth proposal would remove one "stand-down" day a year and another five days of "recreation leave" that was granted on a discretionary basis to those who had performed arduous tasks or prolonged duty.
The hearing included a closed session with the vice-chief of the Defence Force, Vice Admiral Ray Griggs, but outside he told reporters Australia had one of the best compensated militaries in the world during operational service.
Prime Minister Tony Abbott is pinning the blame on Labor and the budget deficit for his government's refusal to offer the nation's armed forces a generous pay rise.
Mr Abbott said the government wanted to do the right thing by the nation's armed forces, but could not afford it because of a massive deficit caused by a six-year spending spree by the former government.
Opposition Leader Bill Shorten slammed the offer, saying ADF wages had increased by an average of 3 per cent a year over the past three years and there were proposals to permanently take away compensatory Christmas and recreation leave.
- with AAP