Treasurer Peter Gutwein has expressed his disappointment after health unions rejected the government's latest wage offer.
Australian Nursing and Midwifery Federation Tasmania branch secretary Emily Shepherd said the union was asking for additional allowances to ensure the future recruitment and retention of staff.
"Ultimately the counter offer that has gone back to government is accepting the wages proposal, but what is being asked for is additional allowances that will potentially increase the overall cost of the package," she said.
"It means we will be able to retain our nurses and midwives in Tasmania."
Mr Gutwein said the move was disappointing.
"We believe our offer was not only fair and reasonable, but also affordable and would deliver on the priorities put forward by the union," Mr Gutwein said.
The latest offer includes a 2 per cent increase in the first year, followed by 2.5 per cent in the second and third years.