Unions have condemned the NSW government for keeping public sector wages capped at 2.5 per cent while slashing back-office jobs.
Treasurer Dominic Perrottet is expected to deliver a lower-than-expected $802 million surplus in 2018/19 despite falls in GST and stamp duty revenue and commitments to boost the number of teachers, doctors, nurses and police.
Saving measures include cutting about 2000 of the 40,000-odd administrative jobs in the public sector.
"If you cut the job of an administrative worker you don't remove their work," Unions NSW secretary Mark Morey said in a statement on Tuesday.
"It just gets done by a paramedic, a nurse or a teacher instead."
Mr Morey also said the treasurer had "squibbed" his chance to become an economic player by boosting how much the nation's largest employer pays its workers.
"If it won't breathe life into wages, who will?"
But the budget and its forecasts of surpluses averaging $1.7 billion over the next four years impressed business groups.
"It's important to note how far we have come in building such a solid position, and despite some economic headwinds, NSW continues to enjoy the strongest performing labour market in the nation, and by some margin," NSW Business Chamber chief executive Stephen Cartwright said in a statement.
Australian Industry Group NSW boss Mark Goodsell said cutting back-office jobs instead of reducing wage increases across the board made sense.
"This has some dangers including a period of introspection as the public sector is restructured and the potential for unintended consequences," he said in a statement.
"However, it does highlight the need for government to be in close touch with the fall-out from the decisions it makes."
Australian Associated Press