A state treasurer has declared mission accomplished on getting the budget back in the black but experts warn she might have gone the early crow.
Preparing to hand down her first Victorian budget on Tuesday, Treasurer Jaclyn Symes revealed it would forecast a $600 million net operating surplus next financial year.
It is the state's first operating surplus since the COVID-19 pandemic but $1 billion smaller than predicted six months ago after Ms Symes signed off on free public transport for children and seniors.
Ms Symes said she could have posted a larger surplus but chose to "back Victorians" with cost-of-living relief and boosted frontline services.
"These are the priorities that Victorians expect a Labor government to get behind," she told reporters on Monday.
Independent economist Saul Eslake said the forecast of growing net operating surpluses in the coming years should be greeted with a "big yawn".
People should instead look at the cash balance on Tuesday, previously forecast to be a $9.4 billion deficit in 2025/26 and a $6.8 billion deficit in 2027/28, because it included infrastructure spending.
"Victoria cannot begin to repay debt - indeed, it cannot begin to stop adding to debt unless it runs cash surpluses," he told AAP.
"I would be pleasantly astonished ... if she (Ms Symes) forecasts a cash surplus in any of the four years to which the forward estimates relate."
The projected operating surplus was too "wafer-thin" to pay down Victoria's mounting debt, Monash University economics lecturer Zac Gross said.
"But also one bushfire, one set of floods, some other disaster ... could blow out a $600 million surplus," the economist said.
"If you're really determined to run a surplus, you want to be aiming for more than half a billion dollars because, to put it bluntly, s*** happens."
Shadow treasurer James Newbury said the surplus was "fake" and questioned the credibility of the government to deliver on key economic markers.
"If they get it $1 billion wrong again this year, they're going to be in a $400 million deficit," he said.
The budget will not contain any new taxes or increases to existing ones beyond usual inflation, with Ms Symes saying she had heard the message that businesses could not cope with another hike.
There will also be budget savings stemming from several thousands of public servants losing their jobs following a review led by Helen Silver.
Further moves to slash duplication and reduce entities will follow once Ms Silver delivers her final report to the government in June, Ms Symes said.
She said net debt, last predicted to top $187.3 billion, would not be projected to reach $200 billion by mid-2029.
"The aggregate will be revealed tomorrow but it won't start with a two," Ms Symes said.
Victorians are expected to be paying $25 million a day by mid-2028, leaving less money for critical services and infrastructure such as hospitals, roads and schools.
Swinburne finance expert Jason Tian said the interest expenses were consuming about 18 per cent of state taxation revenue, effectively swallowing up all stamp duty.
The budget papers will show total infrastructure spending tapering off ahead of the scheduled completion of the Metro and West Gate tunnels and hospitals in Frankston and Footscray in 2025, Ms Symes said.
But Dr Tian argued the economic returns on other major infrastructure projects should be revisited as they were approved during a period of historically low interest rates.
"The state is substantially debt-financing its infrastructure program," he said.
In a stroke of good fortune, the state has been gifted an extra $3.7 billion in federal GST revenue for 2025/26 on top of a $3.7 billion boost this financial year.
Mr Eslake said the windfall should make putting the budget together easier, and Ms Symes should bank the money, not fritter it away.
"Pay down debt," he said.
"They're not Western Australia."
