While Treasurer Tom Koutsantonis’ budget projections have been predicated on wage restraint, unions such as the Nursing and Midwifery Federation have already secured pay deals above the stated 1.5 per cent cap.

But the Public Service Association says its own demands for a 2.5 per cent pay rise, and requests to overhaul what it argues is an outdated Enterprise Bargaining Agreement that has effectively remained in place for two decades, have been rebuffed.

“We’re at a stalemate,” PSA general secretary Nev Kitchin told InDaily today.

“They’ve agreed to nothing that we’ve asked for [and] we’re gearing up essentially to go to war.”

The next nominal pay rise for the 37,000-odd workers the PSA says are covered by the agreement is due in October, but it’s understood the union is also determined to lock away an updated agreement given the state’s political uncertainty, with the prospect of a Marshall Liberal Government overseeing deliberations from next March.

“We’ve asked for 2.5 per cent [pay rise] but we’ve asked for other amendments to our existing EB, and at this stage they’ve come back with a ‘no’ to everything, and capped it at 1.5 per cent, which clearly we’re not going to do,” Kitchin said.

The current EB expired in December, but its provisions remain in place.

Kitchin says the union is “in the throes of having hundreds of consultation meetings with our members”.

“They’re adamant they’ll not accept the 1.5 per cent offer from Government, and they’re really disappointed in the approach the Government has taken,” he said.

InDaily has been told 90 per cent of members surveyed rejected the Government’s current stance, while more than half said they would be willing to take stop-work action.

Kitchin said if there was no movement by the end of next week a members’ meeting would be called, at which “they will more than likely put forward a range of suggestions which I will then authorise”.

This would involve “a range of industrial bans”, which could include overtime bans, “no filling out of log books and no completion of ministerial reports”.

“It’s hard to predict what the members will decide [but] we’re in the throes of gearing up… if we don’t get some positive movement, I’d suggest by the end of next week it will essentially be game on.”

It’s understood the union put forward dozens of examples of cost savings within departments to justify its case for a pay deal above the Government’s 1.5 per cent cap.

However, the political and budget impact of compromise by Labor could leave the Government between a rock and a hard place.

Industrial action by the public sector severely damaged Labor’s stocks back in 2011, arguably hastening the political demise of Mike Rann and Kevin Foley after the Government sought significant budget savings.

InDaily has sought a response from the Government.