The NSW premier has raised the possibility of public sector job losses amid the COVID-19 pandemic unless is endorsed by parliament.
Gladys Berejiklian last week sought a freeze on pay rises for MPs, which was extended on Wednesday to include the entire NSW public sector comprising almost 410,000 workers.
The freeze would save about $3 billion, which would be reinvested in public projects.
Unions NSW secretary Mark Morey says the announcement is an act of "economic vandalism" at a time when frontline workers such as nurses 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 on Wednesday.
But Ms Berejiklian on Thursday encouraged the NSW upper house to back the changes, saying public sector jobs would otherwise be at risk.
She admitted the pay freeze could negatively affect frontline workers but said public sector workers had received 2.5 per cent annual pay rises since the coalition took office in 2011.
Under the pay freeze, no public sector workers would face forced redundancies.
"We have a number of options before us and what we've chosen is what we believe to be the fairest option," Ms Berejiklian said.
"If this option isn't accepted by the upper house, we have to go through other options.
"Governments and other organisations have to make decisions according to these times."
Greens MP David Shoebridge vowed to try and block the freeze in the state's upper house where the government doesn't have a majority.
"Today's threats from the premier should be beneath any political leader, but especially now when we are trying to pull together to recover from a pandemic," he said in a statement on Thursday.
"We will always stand with the 400,000 public sector workers who have kept us safe and maintained essential services."
The nurses union has said the coalition was disingenuous to suggest it was grateful for the work done by nurses and midwives' but refuse them a modest pay increase.
"They've been told they can have a pat on the back but (also) a slap in the face, and that is just so disappointing," NSW Nurses and Midwives' Association general secretary Brett Holmes said on Wednesday.
NSW reported one new case of COVID-19 on Thursday: a Queensland woman who had recently returned from overseas and was in hotel quarantine.
Almost 3,100 cases have been recorded in NSW while one person is in intensive care.
Ms Berejiklian on Thursday also revealed that 100,000 people in NSW had taken up free TAFE online courses offered during the COVID-19 pandemic.
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