Labor, coalition agree to reform

Both sides of politics have agreed to an overhaul of parliament that could end its occasional "dysfunction", especially during question time, politicians say.

Labor and the coalition signed up to the reforms on Monday at the behest of the rural independents who will determine which side of politics forms minority government.

The changes include time limits during question time, an independent speaker, the elevation of private members' business and a new parliamentary budget office.

There will also be an acknowledgment of country prior to prayers on each sitting day.

That reform comes despite Opposition Leader Tony Abbott declaring earlier this year that the practice of recognising traditional indigenous owners was "tokenism".

"There's a place for this in the right circumstances but certainly there are many occasions when it does look like tokenism," Mr Abbott said in March.

"To do it as a matter of course, to do it automatically, it does just look like formalism."

On Monday, the manager of opposition business in the lower house, Christopher Pyne, said the coalition's view had changed.

"I think the acknowledgment of country has become par for the course of most government conferences, meetings, events," he told reporters.

"We've simply acknowledged that fact as part of these changes to the standing orders."

Key rural independent Rob Oakeshott said Monday's deal was "an important moment in the history of the Australian parliament".

"The Australian political system up until now has been overly dominated by the executive and the parliament has played a secondary role to the executive (and) the ministers," Mr Oakeshott said.

"That's going to change."

He said limiting questions to 45 seconds and answers to four minutes would result in a shorter, snappier question time that would be "vibrant and tricky".

The speaker will be independent of the parties. If they are a Labor or coalition MP the deputy speaker will come from the other side of politics.

Both will abstain from attending their party room and be "paired" for votes - meaning whichever side provides the speaker won't lose a vote.

Mr Oakeshott said Australia had "dodged a bullet" by reforming the speaker's position.

"Unless we got agreement today on this document we were potentially going to be staring at each other all in a room and embarrassing the nation," he said, adding with the numbers so tight neither party would have wanted to nominate a speaker and therefore "give up a vote".

Labor's house leader Anthony Albanese said the document agreed to by all parties would result in "permanent reform to the culture of the parliament".

"As a result the parliament will be a better place," he said.

In the past oppositions had often taken the view that a dysfunctional parliament reflected badly on the government of the day, Mr Albanese said.

"What I say is a dysfunctional parliament reflects badly on the parliament as a whole," he said.

"Hopefully today with this agreement what we have is goodwill."

On Sunday, Mr Pyne said the speaker should be an independent MP or drawn from the opposition. He also opposed pairing for votes because "the governments' position is actually strengthened because previously the speaker has always been a vote that the government has been down".

But by Monday, the manager of opposition business had changed his tune.

"I'm very happy with these reforms, the coalition has been pushing for them for some time, I'm delighted that the government has come on board," Mr Pyne said.

Allowing the speaker to be automatically paired was necessary because the parliament was hung, he acknowledged.

"But I can give you this commitment. If a coalition government has a clear majority of its own in the future ... we would seek to go even further and establish a Westminster-style speaker."

In that case there'd be a speaker who would "leave their party, is not paired but is not contested at future elections so they can be even more independent", Mr Pyne said.