Daniel Mookhey outlined the grim outlook on Monday after announcing the 2023/24 budget will be delayed by three months until September, as the government considers what services might be cut.
In the meantime, the Labor government will provide an economic statement to the parliament in June.
A pre-election budget update showed the state's deficit would be $12 billion by the end of the 2022/23 financial year.
Mr Mookehy said while this year's forecast was "current" he pointed to a seven billion dollar deficit in 2023/24 before a projected return to a small surplus in 2024/25.
"NSW is now facing around seven billion dollars of additional hard-to-avoid pressures over the next four years," he told reporters in Sydney.
Finance Minister Courtney Houssos will head a review into the budget after the new government found numerous costs had not been accounted for, budget overruns and programs had been funded on a temporary basis "despite the obvious need for continued investment".
"The comprehensive expenditure review that I will be leading will be assessing how the government will be spending its money," Ms Houssos said.
"We must ensure that our valuable taxpayer dollars are being spent prudently and on the right priorities," she said.
The treasurer said funding for 1112 temporary nurses hired by the previous government stops from 2024/25 onwards, "masking $380 million of additional expenditure" from the budget bottom line.
Additionally, there's a $700 million shortfall in funds available for children in out-of-home care due to overruns.
"A number" of programs were unfunded, including the agency tasked with building the cyber resilience of all NSW government entities - Cyber Security NSW - which had zero dollars allocated for the final two financial years of the budget cycle.
The dismal financial outlook includes an additional $2.2 billion in difficult to avoid pressures, including high inflation, higher interest rates and "the largest debt in our state's history".
"We face difficult choices ahead as we make sure the public's money is spent on the public's priorities," Mr Mookhey said, while promising that the state's debt position would be no worse off than under the coalition.
The treasurer was pressed on what the "tough choices" in the form of cuts might look like.
"We're not here to announce cuts," Mr Mookhey said.
"We're going through the budget line by line."
He maintained there would be no changes to the government's commitments, nor would there be an increase in state borrowings.
The promise to give essential workers a pay rise of at least three per cent remains.
Last week, the government ordered a major review of the Sydney Metro project after cost blowouts topped $20 billion.
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