The federal government has been told to hurry up and put a new pay deal to the nation's 57,000 soldiers, sailors and Air Force personnel.
But military advocacy groups say the Defence Force members should prepare for a below-inflation offers and that the delay in finalising an arrangement is "disrespect to our men and women in uniform".
As the government commits the Australian armed forces to the fight in Iraq, military advocacy group The Defence Welfare Association says there is increasing anxiety in the ranks over their wages for the next three years.
A wage determination for Australia's 57,000 men and women in uniform is due by November and their pay offer has traditionally closely aligned with that offered to Defence Department civilian counterparts.
But the Defence Welfare Association says it is worried at the prospect of a pay offer of less than 0.9 per cent a year, with annual inflation running at 3 per cent, and the targeting of service conditions amid the government's search for public sector "productivity gains".
Association President David Jamison says the bureaucratic process for agreeing the wage deal has stalled and he does not know when the Defence Force Remuneration Tribunal will be able to sit and consider the government's offer to its troops.
As part of the convoluted process for agreeing the new wage structure, the Public Service Commission, representing Public Service Minister Eric Abetz must "bring matters forward" to the Tribunal.
The Canberra Times understands the Tribunal told military authorities to submit their plans by Friday or face further delays.
Mr Jamison, a former army colonel, said on Wednesday that there was no excuse for the delays.
"I can't understand it, they've known for three years that the end of the current agreement is November and they ought to have been working on it for some time," he said.
"It seems that there are policy issues and perhaps the Australian Public Service Commission is being a bit obstructive."
A spokesman for the Public Service Commission refused on Wednesday to say whether the new "ADF Workplace Remuneration Arrangement" had been approved by the Commission.
"No comment," he said.
"The Commonwealth will make its submission to the DFRT in accordance with government policy and tribunal procedures in due course."
Mr Jamison said that the military's lower ranks were badly in need of a pay rise but he feared that working conditions and entitlements would come under attack.
"We're anticipating that they'll have to make actual real money savings to produce any sort of an outcome at all," Mr Jamison said.
"So we're expecting there are going to be some productivity benefits required which means they're going to demand more and more of our soldiers,
"We're a little bit fearful that some of the other employment conditions might be cut back as well and they'll come up with all sorts of stories about them no longer being relevant.
"The lower ranks are the ones who need an increase and we're dead keen to see the senior ranks forgo some of their projected increase to fund some of the lower ranks' increase, we're keen to see that they get looked after."
He said the mood of his association's members and their families was one of deep mistrust in their political masters on wages and conditions.
"They're cynical, there's just plain distrust and scepticism," Mr Jamison said.
"They're needs to be more openness and transparency in the way they (the government) goes about these things."