Tony Abbott was due to meet with Lambie on the pay issue on Monday, but that meeting has been postponed.

Prime minister says decision not to proceed with changes to defence personnel allowances and entitlements was result of discussion with backbench

The prime minister, Tony Abbott, has announced that changes to defence allowances will not go ahead, but insists the backdown came after discussions with his backbench, rather than the intense lobbying of newly-independent senator Jacqui Lambie.

“We are not going to proceed with those changes to allowances. I want to acknowledge that we are listening to the defence community on this subject,” Abbott told reporters on Monday.

“I have discussed this matter with a number of my parliamentary colleagues, such as Jane Prentice, Ewen Jones, Natasha Griggs and Teresa Gambaro, because they represent seats that have the very large defence component.

“They have lots of defence personnel as their constituents and they certainly have been letting me know that it was important to offer this concession to our defence force personnel given the burdens they carry for all of us,” he said.

Defence personnel stood to lose a number of allowances and entitlements, including a component of Christmas leave and food and travel entitlements, in exchange for a 1.5% pay increase under a deal announced last month. The increase is below inflation and amounts to a cut in real terms.

Abbott rejected the idea that the backflip on allowances was a sweetener for Lambie, who left the Palmer United party (PUP) after vowing to vote down all government legislation in the Senate until a better pay deal was offered to defence personnel.

“We haven’t been able to meet all of her requests and, frankly, this government is not in the business of listening to each and every member of the crossbench in the Senate and saying ‘Of course, you can have what you want’. We’re in the business of doing what we think is best under the circumstances in which we find ourselves,” Abbott said.

Monday is the last day that the government can revise its pay offer with the Defence Force remuneration tribunal. Lambie was due to meet with Abbott on the pay issue on Monday, but that meeting has been postponed.

“I’m actually really disappointed, to be honest,” Lambie said, adding that no reason was given as to why the meeting was delayed and no alternative date had been offered.

She is not impressed with Abbott’s concession on allowances.

“That’s not good enough. He knows what needs to be done and that’s a 3% [pay increase] and all their recreation leave returned to them over the Christmas period.

“That’s another slap in the face, and completely disrespectful to the men and women who wear the uniform.

“It is taking things back to the status quo before the pay rise was announced a couple of weeks ago,” vice president of the Defence Force welfare association, Les Bienkiewicz, told ABC TV.

“The allowances and leave entitlements should never have been traded off any pay increase. It is a nonsense to suggest these so-called productivity increases would pay for a pay rise.”

Bienkiewicz has pledged to keep lobbying the government to increase the pay offer.

“We think it’s letting down the members of the ADF. The members of the ADF aren’t out to make a lot of money when they serve in the ADF but they do expect to be treated fairly. We believe that a fair pay rise would be something in the order of 3% to keep up with CPI and the the cost of living; 1.5% is totally inadequate,” he said.

A petition containing 60,000 signatures was handed to politicians at parliament house on Monday morning, calling for the government to boost its pay offer.