Defence families across Australia are not happy about a military wage deal of less than half the rate of inflation and the stripping back of soldiers' workplace entitlements, their advocacy group says.

Just days after the nation's armed forces were committed to war in Iraq, 57,000 men and women in uniform were told they will have to give up some of their Christmas and recreational leave in order to get the pay rise of just 1.5 per cent a year over the next three years.

Discontent: Australian Defence Force personnel have been offered a wage increase of 1.5 per cent a year.

The Australian Defence Force Welfare Association says that more than 700 service families had contacted the organisation within hours of the wage package being announced, many of them expressing agitation at the "reduction in real wages".

The Chief of the Defence Force Mark Binskin told the military on Friday morning that he expected discontent in the ranks over the offer but said it was "as good an outcome as I can negotiate in the current climate".