The budget to be handed down in June will shift to a new "performance and wellbeing" framework which will help improve transparency and accountability, while driving better social outcomes, the Labor government says.
It will replace the former coalition government's outcomes statement, which Finance Minister Courtney Houssos described as a "polite fiction".
"(That was) a gesture towards accountability on government spend without actually achieving it," she said on Monday.
The replacement system would measure how well the government met its priorities with an emphasis on key services like health, education, transport and housing.
Targets for vital services like health, education, transport and housing will be scrutinised. (Dan Himbrechts/AAP PHOTOS)
"Being up-front and honest about the challenges means providing genuine data that's transparent, reliable and accessible to the people of NSW," Ms Houssos said.
The first set of indicators published in the budget will be expanded in future editions following a parliamentary inquiry.
The shift in NSW follows a similar federal move, which included the release of the first "national wellbeing framework" in July in line with similar schemes introduced in Canada and New Zealand.
It introduced 50 indicators to measure health, sustainability and cohesion, among other benchmarks, to gauge outcomes alongside traditional indicators like GDP and employment.
The approach was previously lambasted by the federal coalition, with then-treasurer Josh Frydenberg suggesting the plan would replace a balanced budget with "meditation mats (and) hugs for all".
NSW Greens MP Abigail Boyd introduced a bill in June calling for the wellbeing of people and the planet to be considered indicators of successful budgeting of the state's funds, rather than a focus on maintaining a triple-A credit rating.
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