Prime Minister Anthony Albanese laid out the proposal to Labor party faithful in Sydney after receiving a rock star's welcome.

The NSW Labor conference is taking place throughout the weekend with more than 800 delegates expected.

"It's a modern policy for modern families," he said on Saturday.

An extra fortnight of paid parental leave will be added each year until the full 26 weeks is available from July 2026.

By that time, every family with a new baby will be able to access a total of six months' paid leave, shared between the two parents.

Families will also have greater flexibility, with paid parental leave able to be taken in blocks between periods of work.

Single parents will be able to access all 26 weeks.

The scheme will maintain "use it or lose it" rules to encourage more fathers and partners to take the paid leave and ensure caring responsibilities are shared more equally.

Mr Albanese said the paid parental leave reforms would benefit families, improve women's economic equality and boost the broader Australian budget.

"This is economic reform," he said.

"The full and equal and respectful participation of women in our economy is our nation's greatest untapped resource."

Mr Albanese said 26 weeks of parental leave was a "baseline" and he expected employers to compete and offer working parents the best possible deal.

The reform promises to be the centrepiece of the Albanese government's October budget, which the prime minister said would put equality for women at its heart.

Mr Albanese promised a "responsible, fair and reforming" budget as he blasted the previous coalition government's economic management.

This included a lack of aged care and disability care investment, stagnant wage growth and a looming $1 trillion in debt.

"We understand that not every problem can be solved in one budget," Mr Albanese said.

"We all know that progress demands patience, change can be painstaking. Building to last always takes time."

Mr Albanese also recommitted his government to holding a referendum on Indigenous voice to parliament next financial year, telling critics: "If not now, when?"

Earlier, Labor supporters were told an election war chest was ready as the party looks to have NSW Opposition Leader Chris Minns take Macquarie Street in March next year.

He is facing an internal brawl at the state conference over tough anti-protest laws.

The party's left faction wants a Minns-led government to repeal the penalties designed to stop activists causing traffic chaos, laws the state Labor leader has backed.

Labor members were urged to put factionalism and infighting behind ahead of the state poll to help secure a win.

Unions NSW head Mark Morey told party delegates not to "let this moment slip by".

"Don't get me wrong, it's going to be hard," he said on Saturday.

"We're up against a formidable opponent. They'll lie, they'll slander."

Australian Associated Press