State workers have been offered wage increases worth billions of dollars but unions want more for tens of thousands of essential workers in NSW.
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More than 400,000 of the state's public sector employees are being offered a 10.5 per cent pay rise over three years, including a mandatory increase in superannuation payments.
The move would give certainty to frontline workers, although the NSW government on Monday said talks had only recently begun on the deal.
Multiple unions and agencies will have to consider the policy to cover workers under more than 70 awards, with several groups already flagging they will push for more than what has been put on the table.
The deal would cost about $3.6 billion but was accounted for in the last budget's essential services fund, Treasurer Daniel Mookhey said.
"We can afford to make this investment because we are paying our creditors less and as a result we can pay our essential workers more," he said.
Unions NSW, the peak body for the state's worker organisations, immediately criticised the offer, saying it was only worth 9.5 per cent without the mandatory super increase.
"No worker in Australia should be paying for their own superannuation," secretary Mark Morey said.
The wage offer also falls below pay demands from unions representing some key workers, including firefighters and nurses.
Others such as teachers have secured large, one-year increases but are yet to negotiate longer-term agreements.
Opposition Leader Mark Speakman said he feared "savage cuts" to services in order to fund the increase.
"This is a government that has lost control of its budget," he said.
Premier Chris Minns said it was an appropriate offer that represented a real wage increase for frontline workers, whose pay and conditions were a priority.
The offer includes an annual $1000 "cost-of-living protection payment" to be distributed if inflation tops 4.5 per cent in a year.
The last state budget predicted Sydney consumer prices would rise 4.75 per cent in the current financial year, but the key inflation measure would drop to 2.5 per cent by 2026/27.
Mr Mookhey said the state was sharing the risk of inflationary shocks with its workers as it moved them into three-year agreements and price rises were not expected to breach the 4.5 per cent ceiling.
But Mr Morey said the trigger for the payment had been designed to fail and the $1000 payment should be immediately put into the pay packets of essential workers to help retain them.
The Labor government has been working to fill worker shortages in a range of sectors after lifting the former coalition government's 2.5 per cent wage cap, which it says was a major obstacle to increasing frontline staff.
The Industrial Relations Commission will be on hand to assist when negotiations get stuck as the government hailed what it said would be a "collaborative" rather than adversarial process.
NSW Nurses and Midwives Association assistant general secretary Michael Whaites said a higher pay rise was needed to match other states and avoid losing workers.
"We wait to see how much the government is really willing to bargain up," he said.
Australian Associated Press
