Labor employment spokesman Brendan O'Connor said the budget figures only allowed for public sector wages to increase by $297 million, which was not enough to keep pace with inflation.

"The public sector wages bill, which is forecast to increase by only 1.49 per cent by 2018-19, suggests a wage freeze or thousands more public sector workers sacked by 2018-19," Mr O'Connor said in a statement.

This year's budget was seen as relatively mild on public sector jobs, with pre-budget scares of deeper spending cuts and mass public service redundancies failing to materialise, compared to last year's slash and burn.

The government declared an end to the public hiring freeze in the budget, but remained committed to a hardline wage policy and two more years of sharp 2.5 per cent "efficiency dividend" savings for departments.

But Mr O'Connor said this year's budget was no better for jobs, despite the government's promises.

"Under the Abbott Government's policy, every government department and agency has been left with nowhere to turn but to cut costs through cutting real wages and working conditions," Mr O'Connor said.

One of the most contentious measures for public servants in the budget is new paid paternal leave arrangements.

Many women are to be stripped of maternity leave entitlements and forced to choose between their workplace parental leave schemes and that provided by the government as Mr Hockey moves to end what he called "double dipping".

Prime Minister Tony Abbott has used public servant parents who "double dip" to defend the government's decision.