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Retirees must be given "a fair go" by the banks for staying loyal during the pandemic, the prime minister says.

The Reserve Bank of Australia has raised the official cash rate from a historic low of 0.1 per cent to 0.35 per cent - the first rise since 2010.

The big four banks have passed on the rise to borrowers, with the cost of living already a key issue in the May 21 election campaign.

Announcing a freeze to the deeming rate for almost 900,000 social security recipients, Scott Morrison said self-funded retirees had been "doing it tough" in the past two years.

"My message to the banks is to give (deposit holders) a fair go," the prime minister told reporters in the Adelaide seat of Boothby on Wednesday.

"I'd be encouraging the banks - it's obviously their call and there is no way to force them to do that - in fairness to those deposit-holders who have stood by their savings.

"They deserve the recognition of that, ensuring that those (interest) benefits are passed on directly to them."

The Morrison government is on the defensive after the central bank raised interest rates for the first time in more than a decade.

The deeming rate freeze will apply to 885,000 people, with the lower deeming rate set to remain at 0.25 per cent, while the upper deeming rate will stay at 2.25 per cent.

Social Services Minister Anne Ruston said the freeze would provide greater financial certainty for older Australians.

"We know that older Australians particularly have felt the uncertainty of the last two years very, very keenly and the decision today to freeze deeming rates for the next few years provides them with two years of certainty," she said.

Anthony Albanese, who campaigned in the Victorian seat of Chisholm on Wednesday, noted the prime minister had previously been "dragged kicking and screaming to make any changes to deeming rates".

Mr Albanese said the government was oblivious to cost of living pressures on working families.

"The combination of low wage growth, rising inflation, and rising interest rates is putting real pressure on working families in the suburbs and the regional towns of Australia," he said.

"Scott Morrison has an excuse for everything and a plan for nothing. He wants to always take credit when things are going well, but never accept any responsibility when things aren't."

Treasurer Josh Frydenberg, who debated his Labor counterpart Jim Chalmers at the National Press Club on Wednesday, said the COVID-19 pandemic and war in Ukraine were "the main drivers" of inflation.

But the government was doing what it could to ease cost of living pressures, including halving the fuel tax, cutting the cost of medicines and providing cash payments.

"Australians are doing it tough right now and just as we had their back at the height of the pandemic, we have their back now," Mr Frydenberg said.

Dr Chalmers said the cost of living crisis began well before the pandemic and Ukraine war, with wages not keeping pace with inflation and the government presiding over a "wasted decade of missed opportunities".

"My heroes are the essential workers and the shiftworkers who did so much to keep the wheels of the Australian national economy turning throughout the course of this pandemic," he said.

"And the reward for their efforts can't be another three years of working hard, but still going backwards in this economy."

© AAP 2022

More than 250 public schools have been closed across NSW as teachers demanding "more than thanks" go on strike for 24 hours over staff shortages and a dispute over pay.

About 15,000 teachers took part in the rally outside NSW Parliament in Sydney on Wednesday, while thousands more protested regionally.

Greenacre Public School principal Melissa Proctor said she could never find enough teachers for the almost 800 students at her school in Sydney's southwest.

Specialist teachers were teaching subjects they weren't qualified for amid a staffing shortage that was getting worse.

"Amazing teachers are leaving our profession because they can't cope with the ever increasing demand of the workload and the impact that has on their own families and wellbeing," she said.

Ms Proctor said the last few years have been the worst in her 25-year career as a teacher and principal.

Braidwood Central School teacher Alisa Stephens, daughter of a public school teacher and married to one as well, said the role has changed and teachers are now expected to do much more than their pay accounts for.

"Teaching is a job that is impossible to do in our paid hours, and the government knows that," she said.

"Unfortunately for us, our families know that too."

Along with nurses, paramedics and public transport staff, teachers want a pay rise above the 2.5 per cent cap on NSW public sector wage rises that has stood since 2011.

They also want pay for some of the extra time they spend on lesson planning and other paperwork.

The NSW Education Department listed 264 schools as "not operating" on Wednesday, with parents urged to keep children home as there was minimal supervision at schools that were open.

Education Minister Sarah Mitchell said the disruption to students and parents caused by the strike was "frustrating and disappointing".

NSW Teachers Federation president Angelo Gavrielatos said children were having their learning disrupted every day due to a lack of teachers causing classes to merge.

"To say their learning is being disrupted is a massive understatement, and yet the premier and the minister want to lecture us about disruption," he said.

Teacher shortages will get worse if their pay doesn't get better, Mr Gavrielatos said.

Ms Mitchell asked the union to cancel the strike on Tuesday, telling them to wait until the June 21 state budget when the government will address public sector demands for increased pay.

Labor education spokeswoman Prue Car said it was silly of the government to keep hinting at relief in the budget.

"Just tell us what it is so we can avoid this disruption and actually get some solutions for the key workers that got families through the hell of the last two years," Ms Car said.

Uralla Central School principal Michael Rathborne said the budget promise was akin to a pat on the head, and accused Ms Mitchell of denying there was a problem with staffing in the state's schools.

"It's not good enough," he said.

"Things have never been worse."

Staff absences led to at least one class being cancelled every day at his school, and he and his deputy principal regularly had to teach classes themselves.

His search for a school counsellor, after seven churned through the school in eight years, was on its third round of recruiting.

Ms Car declined to say what wages would look like if Labor wins the March election, but said teachers deserve more than their current rates.

Public sector workforce wage rises amount to billions of dollars and the government has competing priorities that need to be balanced, Ms Mitchell told Sydney radio 2GB.

"These are major decisions that should actually be made as part of a proper budget process, not in response to union demands," she said.

© AAP 2022

More than 200 public schools across NSW are closed as teachers strike for 24 hours.

Thousands of teachers are striking on Wednesday in a bid for more pay and a reduced workload.

The NSW Education Department has listed 209 schools as "not operating" and parents have been urged to keep children at home as there will be minimal supervision at schools that are open.

Education Minister Sarah Mitchell says the disruption to students and parents caused by the strike is "frustrating and disappointing".

She had asked the union to cancel the industrial action after Premier Dominic Perrottet indicated he would lift the 2.5 per cent wage increase cap for public sector workers in the June 21 budget.

"We are actively looking at this as part of the budget and not just for teachers, but all our frontline staff and we made that clear," Ms Mitchell told the Nine Network on Wednesday.

"We understand cost of living and household budgets.

"We want to get the right result for our frontline staff.

"We're committed to doing that as part of the budget process."

Labor's education spokeswoman Prue Car accused the government of being out of touch with workers.

The government has created a new salary band for the chiefs of staff of some ministers, effectively giving them a 10 per cent pay rise, with the top salary increasing from $320,000 to $354,201.

Ms Mitchell said that figure was an upper limit.

"My understanding is that those bands are effectively like a limit on what can be paid to staff ... and there aren't any ministerial staff who are being paid at the top of that top band," she told Sydney radio 2GB.

Teachers are rallying outside NSW Parliament House as part of their campaign for two hours of extra planning time as well as a pay rise of between five and 7.5 per cent.

NSW Teachers Federation president Angelo Gavrielatos says unsustainable workloads and uncompetitive salaries are the main reasons teachers are leaving the profession.

Public sector pay increases have been capped at 2.5 per cent per annum for more than a decade.

Mr Gavrielatos says the promise to address wages in the budget was not a guarantee and teachers had been patient with the government in attempts to negotiate since February last year.

Ms Mitchell on Tuesday directed her department not to push ahead with a 2.04 per cent annual pay rise that was due to go before the Industrial Relations Commission next week.

Public sector workforce wage rises amount to billions of dollars and the government has competing priorities that need to be balanced, Ms Mitchell said.

"These are major decisions that should actually be made as part of a proper budget process, not in response to union demands," she said.

© AAP 2022