Nurses, firefighters and other NSW public sector workers have been offered the highest wage rise in 12 years but will still fall further behind inflation.
The offer of 4.0 per cent plus a 0.5 per cent increase in superannuation would mean an annual increase of $2484 for a school support officer, $2694 for a registered nurse and $3189 for a second-year paramedic.
Treasurer Daniel Mookhey is spruiking it as "the biggest pay rise the NSW public sector has got in more than a decade".
"We've made it very clear that we want to make sure every public sector worker gets a fair outcome," he told reporters on Monday.
"Given there's been a lot of frustration (previously) about certain parts of the workforce getting less than others, we're very clear that we want to make this a public sector-wide policy."
Labor's offer is budgeted at $616 million for the first year and exceeds both the previous coalition government's wages cap and last offer.
But it will likely represent a cut to real wages, with annual inflation running at 7.0 per cent in the March quarter.
Mr Mookhey said the state's finances could not allow an offer in line with inflation and "it is going to take time" for that to occur.
State debt is forecast to reach a record $180 billion within three years while the government is mindful to not further fuel inflation.
"Given the crisis in our essential services, we get the urgency of (a real wage increase)," he said.
"That's why incidentally, in addition to the wage aspect, we've been working with unions around a lot of non-wage conditions, which they say are crucially important for us to be able to retain essential workers."
Industrial Relations Minister Sophie Cotsis says workers will also benefit from a modernised bargaining system, announcing she's asked two former senior officials of the federal and NSW wages umpires to head up a new co-operative interest-based approach.
"We've seen over the last 12 years that there has not been a co-operative approach with respect to our essential workers," she said.
Shadow Treasurer Damien Tudehope accused the government of duping frontline workers by making higher wages a central plank of their election campaign.
"That wage offer to public sector workers is, in effect, a slap in the face and duping them in terms of what they were told before the election," he said.
He rubbished the idea the $618 million offer would have zero impact to the budget, telling taxpayers "you will be paying for it".
Last week the government outlined pay freezes for MPs and senior officials and a reduced reliance on labour hire were among ways the government would cover the cost of higher public sector wages.
