The tribunal has adjourned to consider the Government’s proposal for servicemen and women to receive a pay increase of 1.5 per cent a year for three years, which is less than the current inflation rate.

Les Bieniewicz from the Defence Force Welfare Association (DFWA) said his association made it clear to the tribunal the deal was below inflation and some personnel would be suffering a wages cut.

Prime Minister Tony Abbott said it was a reality of Labor’s debt.

“When you’re in a situation of $50 billion deficit you cannot be as generous as you are when you’re in a situation of $20 billion surplus,” Mr Abbott said.

“At the moment, we are simply borrowing money to pay people. That is why it is important that we have very significant pay restraint.”