New South Wales Treasurer Mike Baird is refusing to confirm reports he will cut 10,000 public service jobs in his state budget next Tuesday.
The Sydney Morning Herald says the cuts will be in addition to 5000 announced in September.
NSW is facing a deficit of $A826 million deficit next financial year, partly due to a $A5 billion drop in forecast GST payments.
Mr Baird will not say exactly how big the budget deficit will be, but the government will be making tough and necessary decisions to restore the state's finances.
"We inherited a government book of finances that showed spending was out of control," he said. "Those days have to end."
The ABC reports unions want a guarantee that front-line workers like teachers, police and nurses won't be affected.