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Smiling: Julia Gillard would get $12,000 a year more as PM

Julia Gillard will become Australia's first politician to earn more than $500,000 a year after she was awarded a $12,000 pay rise - as long as she is still in the top job next month.

Federal politicians were yesterday granted a 2.4 per cent pay rise by the Remuneration Tribunal that will take effect from July 1, just 11 weeks before polling day.

The increase will take a backbencher's base pay from $190,550 a year to $195,130.

The Prime Minister's pay packet will swell from $495,430 to $507,338.

Deputy Prime Minister and Treasurer Wayne Swan's salary will break through the $400,000 a year barrier. And Opposition Leader Tony Abbott's annual pay jumps almost $8500 to $360,991.

The increase is less than the growth rate in wages, which is running at 3.1 per cent nationally and 3.7 per cent in WA.

Last year's rise for MPs and senators was 3 per cent.

In its determination, the tribunal said an increase of more than 3 per cent would have been justified but it had opted for a "conservative" approach because of the weakened economy. "The most recent information suggests a slowing in wage movements in the community as well as uncertainty regarding economic growth," it said.

The tribunal left the door open for a top-up pay rise in December.

Despite thousands of workers around the country being told in recent weeks they would lose their jobs, as well as the Government cutting spending to salvage the Budget, Ms Gillard defended the pay increase.

"The remuneration for members of Parliament is set entirely independently of government," she said.

WA MPs' pay is decided by the Salaries and Allowances Tribunal, with decisions on rises usually made in August.

'The remuneration for MPs is set independently of government.'"Prime Minister *Julia Gillard *