NSW Agent-General to London Stephen Cartwright says he quickly realised his $600,000 salary package would not allow him to rent in the city and support his family.
"I started to do some of that research as soon as I arrived and was pretty horrified with what I saw," Mr Cartwright told the upper house inquiry on Tuesday.
"I got over here and found out the outrageous rents that you have to pay here, the school fees, that are double anything that you would ever pay in Australia.
"I discovered just how poorly NSW had structured these things."
Mr Cartwright's appointment is being scrutinised after it emerged he sought a salary of $800,000 - almost double the initial offering - and landed the role despite being ranked below other candidates.
The inquiry stems from the controversial appointment of former deputy premier John Barilaro as the senior trade and investment commissioner to the Americas in June, a $500,000-a-year role he resigned from within two weeks.
The inquiry's focus has since been expanded to examine the circumstances surrounding all appointments made to senior overseas trade positions.
The inquiry previously heard Mr Cartwright met with Mr Barilaro for coffee before applying for the role.
He rejected claims his appointment was a case of "jobs for mates".
Mr Cartwright eventually accepted a revised offer of $487,000 base salary with a $113,000 allowance, earning more than the state's five other trade commissioners.
In February, a month after he arrived in London, the state also agreed to pay his rent in London, expected to cost taxpayers $105,000.
By June, Mr Cartwright emailed NSW CEO Amy Brown requesting financial help for his children's school fees.
"You will recall that the (Trade) Minister (Stuart Ayres) was very clear that school fees could be dealt with in the same way that we are dealing with the rent," Mr Cartwright wrote to Investment NSW staff.
Throughout his negotiations with public servants, Mr Cartwright cited conversations and verbal agreements he had reached with ministers.
"Should I have gone to the minister?
"In hindsight if I'd known it was going to cause such a storm ... I probably should have gone to (Secretary of the Department of Premier and Cabinet Michael) Coutts Trotter."
But Mr Cartwright said he formed a view that after 30 years without executive representation in overseas trade, the government was not rolling out the trade positions equitably.
"Investment NSW wasn't really sure how to do a lot of these things," he told the inquiry.
Premier Dominic Perrottet's chief-of-staff Bran Black will also give evidence to the inquiry on Tuesday.
The inquiry previously heard Mr Black had told Ms Brown to give Mr Cartwright whatever he wanted during tense salary negotiations.
Mr Black will also be questioned over the selection process leading to Mr Cartwright's appointment and cabinet discussions before the appointment of Mr Barilaro.
The premier has previously defended Mr Black, saying his understanding of what occurred did not match with Ms Brown's evidence.
Mr Cartwright, a former executive from Business NSW, also criticised Ms Brown during a previous hearing, saying she lacked experience negotiating with executives.
"When Ms Brown suggested it was a difficult negotiation, all that led me to believe is that she obviously hasn't done too many of them," he said.
