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Police heads are considering laying off staff and closing some stations in an effort to save $360 million over the next three years.
The staff cuts would include police officers and non-sworn staff.
Commissioner Peter Marshall is not commenting on the proposal, but says frontline policing resources will not be reduced.
Any final savings targets would depend on negotiations with the police union on wages, he said.
A source said the proposal was not set in stone, but financial pressures on police were serious and could be exacerbated by the union negotiations.
The Police Association says substantial cuts to police would send the force back to the days of staff shortages, child-abuse cases not being investigated and 111 calls being left unanswered.
"The police force is in the best shape it's ever been in terms of delivering services to the public," association president Greg O'Connor said.
"Reported crime is down, road deaths are down and public confidence is up. We hope the Government understands the fragility of the gains we have made over the years."
The collective contract with the association comes up for negotiation in July. The outcome will be crucial to how police can live within their budget and still give a quality service.
Mr Marshall said the present contract was complex and "lacks sufficient flexibility to meet the needs of the current and future operating environment".
More than 70% of police spending goes on staff - in the past financial year, $1.047 billion out of $1.483 billion in total.
Mr Marshall said there was "no present intention to reduce the frontline policing resource".
But he did not give a commitment that the number of sworn staff would not fall.