Unions say the NSW government's pause on public sector pay rises is "a slap in the face" and industrial action could be on the cards if workers on the front line of the COVID-19 crisis are affected.
Premier Gladys Berejiklian last week announced a freeze on pay rises for MPs and this week extended it to the entire NSW public sector, comprising almost 410,000 workers, which could save $3 billion.
The pause would not apply retrospectively, meaning a public sector worker's 12-month pay freeze would begin with their next pay agreement.
NSW Nurses and Midwives' Association general secretary Brett Holmes said the government is being disingenuous to suggest it's deeply grateful to nurses and midwives but refuse them a modest 2.5 per cent pay increase.
"They've been told they can have a pat on the back but a slap in the face and that is just so disappointing," Mr Holmes said on Wednesday.
Ms Berejiklian has guaranteed no NSW public sector workers will be subject to forced redundancies over the next 12 months, barring senior executives.
She argued that assurance may not have been possible without the pay freeze.
"It's the least-worst option, let me assure you," the premier said.
Unions NSW secretary Mark Morey said the announcement is an act of "economic vandalism" at a time when frontline workers are risking their lives.
"We want to see the economy stimulated and the public sector is one of those areas where that stimulation can occur," Mr Morey said.
The union boss said the premier should be expanding the public sector "and putting extra money into jobs ... particularly in regional and rural areas".
NSW Teachers Federation president Angelo Gavrielatos said the effective pay cut was disrespectful given teachers had "turned themselves inside out" during the pandemic.
"Teachers and principals along with nurses, police, firefighters and all other public sector workers who strive each day to deliver high-quality services should not, along with their families, pay the price for the government's budget blowouts," Mr Gavrielatos said.
Union leaders will discuss the pay freeze with their respective members over the coming week before deciding on their course of action.
Mr Morey said "no option will be taken off the table" when asked about potential strike action.
More than 220,000 people in NSW lost their jobs in April as the spread of COVID-19 battered the state economy.
The unemployment rate jumped 1.1 percentage points to six per cent.
Total employee wages in NSW fell 4.9 per cent between March 14 and May 2.
Treasurer Dominic Perrottet said the freeze marked the government's first change to public sector wage policy after nine years of annual 2.5 per cent pay increases.
He emphasised the $3 billion would not be saved but rather reinvested in public projects.
"There are hundreds of thousands of people right across our state today who are either out of work or taking significant pay cuts," Mr Perrottet said.
"They are the people who pay the wages, whose taxes pay the wages, for our public sector.
"This is not about savings, about the budget ... this is about stimulus, creating jobs right across our state."
Upper house Greens MP David Shoebridge said he would not support the government's pay freeze, which he labelled cruel, and would try and block it in the Legislative Council.
Australian Associated Press