Unions NSW will seek to uncover the secret report that led to a NSW government official to suggest a public-sector wage freeze "would deepen recession".
The advice was contained in a NSW Treasury email sent in mid-April, the peak body for NSW trade unions said on Sunday.
Unions NSW will now seek a court order forcing the government to turn over documents related to that one-line statement, as the battle continues over a controversial 12-month pay freeze plan.
The Berejiklian government says the freeze will guarantee jobs for public servants and free up funds for job-creating projects to support others who have lost work.
But the wage policy has been opposed by unions and frontline workers, including paramedics, nurses, police officers and teachers.
"This advice was given to the NSW Government in good faith, yet it chose to ignore it," Unions NSW secretary Mark Morey said in a statement on Sunday.
"The Government should withdraw its claim to cut public sector wages immediately, and at a very minimum, release the expert advice it chose to ignore."
The document being sought is classified cabinet-in-confidence, meaning it is only meant to be shared on a "need-to-know" basis.
Damien Tudehope, the finance minister and acting treasurer, said the email referred in general terms to the economic impact of reducing pay rises "without reference to reinvesting those funds into stimulus measures".
"This is not the government's policy," he said in a statement on Sunday.
In late May, the government announced the pay rise freeze and said it would use the estimated $3 billion in savings to "accelerate infrastructure programs designed to create jobs".
"The Government made this decision in light of a significant increase in unemployment which has seen tens of thousands of people lose their jobs since the COVID-19 pandemic began," Mr Tudehope said.
"We know when we invest in jobs, we invest in the economy."
After failing to pass the pay rise pause in parliament, the government applied to the state's Industrial Relations Commission to introduce the change.
NSW Labor wants Treasurer Dominic Perrottet to release the secret economic advice, regardless of whether the IRC issues a subpoena.
"If the Treasurer is certain cutting workers pay won't wound the economy, he'd immediately release Treasury's advice," NSW Labor's Acting Shadow Treasurer Daniel Mookhey said in a statement.
"Otherwise he's raising suspicions that Treasury's modelling says his policy threatens to make a severe recession worse."