Treasurer Daniel Mookhey will deliver his first economic update in parliament on Tuesday afternoon.
He's expected to reveal programs left unfunded by the previous government and outline the challenges the state faces.
"It's an opportunity for the government to be candid with the people of NSW about our financial situation and be up-front about the fact that the situation is tough," Mr Mookhey said on Monday.
"There are no easy choices ahead."
After Western Australia's $3.3 billion surplus in March, Queensland last week forecast a record surplus of more than $12b as it rides a property and coal-price boom.
But a surplus won't be on the cards in NSW for years, while state debt has leapt to about $80b or about $9600 for every NSW resident.
Mr Mookhey has already spent the months since the March election detailing "black holes" such as the zero dollars committed by the previous government for Cyber Security NSW in the final two financial years of the budget cycle.
A $700 million shortfall in funds available for children in out-of-home care due to overruns has also been revealed.
While mindful of rising living costs, Mr Mookhey said NSW was one of the country's biggest economic drivers and he did not want to add to inflation - and further interest rate rises - through extra spending.
Failing to work with the Reserve Bank to bring inflation under control would leave mortgage holders, young families and those looking to get into the property market paying the biggest price to "slay the inflation dragon", he said.
"The state government needs to make sure that we are setting our policies so we are not unduly adding to inflationary pressures," Mr Mookhey said.
But the opposition accused Labor of shifting the blame for its broken promises, wrong priorities and the cost blowout from its public sector wage rises.
The coalition also played down the scale of the state debt, which was projected to reach 14 per cent of the state's economy in 2026 - compared to 26.5 per cent in Victoria.
"This is Labor's budget black hole – and these attempts to sheet responsibility back to the former government simply don't pass the test," Opposition Leader Mark Speakman said.
The Minns government has set a goal of keeping debt under the $187 billion forecast for 2025/26 before it took office in March.
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