Defence pay deal under review: Abbott

The federal government is keeping the Defence pay offer under close review, Prime Minister Tony Abbott says.

Labor leader Bill Shorten asked Mr Abbott in parliament on Tuesday whether he would reconsider the "shameful" decision to deliver a real wage cut to Defence personnel over the next three years.

The government is also facing pressure from independent senator Jacqui Lambie, who has vowed to block legislation until a better pay deal is offered.

Mr Abbott said it would be better if the government was able to make a more generous offer, but it was dealing with Labor's debt and deficit legacy.

"We are keeping these matters under close review, but the fact is that we cannot pay people everything that we would like to," he said.

He said Labor had cut $16 billion out of Defence when it was in office.