NSW Opposition Leader Luke Foley says the Baird government's big-spending budget is over-reliant on stamp duty and fails to insulate the state against a future housing crash.
Combined with looming federal cuts to schools and hospitals and the loss of dividends after the sale of state-owned electricity businesses, the state's finances will be left reeling, the Labor leader says.
Mr Foley labelled the budget as "short term" and "lazy" and said "it does nothing to set us up for a sustainable future".
"The surplus is built solely on the rivers of gold from Sydney home-owners paying stamp duty, and when the housing market in Sydney comes off the boil - as it will - a deep deficit will follow," he said.
"The time to repair the roof is when the sun is shining."
The Property Council of Australia warned against relying too heavily on "roller-coaster" stamp duty revenues.
Treasurer Gladys Berejiklian's debut budget forecasts growth in stamp duties across the forward estimates to $8.6 billion in 2018/19.
Stamp duty receipts for this year are expected to come in at $7.3 billion, of which about 75 per cent is from the residential sector.
For Graham Kelly, head of the United Services Union, the problem with the budget is its city-centrism, giving Sydney new hospitals and a new harbour rail crossing but leaving little to the regions.
Yet elsewhere, the reaction to the budget - which includes a $2.5 billion surplus forecast and record school and hospital funding - has been largely muted.
NRMA president Kyle Loades was "very pleased" with the $6.7 billion allocated to NSW roads, including the hundreds of millions earmarked for congestion-busting Sydney motorways.
The Australian Medical Association welcomed a record $21 billion health spend, including the $1.4 billion to build and rebuild hospitals.
But NSW branch president Dr Saxon Smith echoed Mr Foley's warning about the federal cuts, which are due to start from June 2017.
He warned that the "game of chicken" between the Abbott government and the states must end.
With Canberra contributing some 40 per cent of state revenue, Ms Berejiklian has already promised to take up the fight later in the year.
"It will become more and more difficult for us to live within our means, but we're absolutely committed to it," she said on Tuesday.
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