Voters will go to the polls on Saturday without knowing the budget impacts of Labor's signature policy to scrap the public sector wage cap, but it is likely to cost billions.
Labor plans to negotiate wage deals with each sector individually, which means it's unclear exactly how much it will spend on public service salary increases.
The Parliamentary Budget Office (PBO) warned increasing public sector wages would have a significant impact on NSW's finances.
The PBO, which has independently reviewed both the Coalition and Labor election promises, found a 1 per cent wage rise on the current cap would increase government costs by $2.6 billion over three years.
Currently, wage rises are capped at 3 per cent this year for public sector workers and then 2.5 per cent for each of the next two years.
The example from the PBO is based on a 4 per cent pay rise this year, then 3.5 per cent for the following years — and "to fully offset these costs, the government would need to identify new productivity savings".
Shadow Treasurer Daniel Mookhey said Labor had identified savings.
"Essential workers will always have better pay, better conditions under Labor and will continue to own assets like Sydney Water," he said.
"We're promising a better system that allows us to sit down and talk with essential workers about how we can improve their pay and conditions."
The costings revealed that, over the next four years, Labor's proposed savings would include decreasing government sector expenses by $1.2 billion while the cut under the Coalition would be more modest at $500 million.
Throughout the campaign, the Coalition has raised concerns about the budget black hole that would be created by Labor's plan to scrap the wage cap.
Today, Treasurer Matt Kean called the policy a "fantasy" because it could not be costed.
"This is not a policy; this is a joke," he said.
"Our policies are costed; our policies are funded."
The PBO said the costings of the Coalition's promises would result in $3 billion more spent on capital expenditure than had been budgeted over four years.
The costings found Labor would reduce capital expenditure by $675 million.
The Coalition would also increase net borrowing, while Labor would decrease it.
