· In short: Several projects and policies have been delayed as the Victorian government attempts to chart a path back to surplus.

· Credit rating agency S&P Global Ratings said successfully bringing down the state's net debt would be critical to safeguard its AA rating.

· The opposition has accused the government of failing to manage the state's finances over many years.

The Victorian budget has confirmed delays to the Airport Rail Link, as the state government outlines its plan to tackle the state's rising record debt.

Treasurer Tim Pallas's 10th budget has still contained plenty of spending, with no new major taxes introduced.

Parents will get the biggest budget sweetener, with $400 credits to help with education expenses for children at government schools, as Premier Jacinta Allan tries to focus on families in her first budget in the top job.

Victorian ratepayers have also been asked to chip in through an increase to the fire services levy.

Despite the rhetoric of better economic management, Victoria's net debt continues to climb.

Net debt is now forecast to hit $187.8 billion by 2027-28, when Victorians will be paying roughly $25 million each day on interest payments.

The budget faces a $2.2 billion deficit this financial year but is projected to return to a surplus of $1.5 billion by 2025-26.

The treasurer has defended the budget as one that strikes a responsible balance without taking "the economic momentum out of the economy".

Mr Pallas said his government was focused on moving past COVID debt by reducing net debt as a proportion of the state's economy.

Budget figures show net debt represented roughly 20 per cent of gross state product (GSP) in 2022-23, and is set to climb to 25.2 per cent in 2026-27, before dropping slightly to 25.1 per cent the following year.

When pressed on the impact of that debt on future generations, the treasurer said it was important the figures were viewed in context.

"I can assure Victorians that our priorities are on the commitments we gave them and recognise the material circumstances of the time and do no harm to the continuing growth and resurgence of the Victorian economy," he said.

Mr Pallas said a reduction in government advertising and selling government office spaces were among the measures that would keep government expenditure at an average growth rate of 2.2 per cent per year.

"Pretty profound in anyone's language," he said.

"You haven't seen that in this state for 15 years."

Airport 'stand-off' sees delay of at least four years

Some big-ticket infrastructure items have also had their timelines pushed back, including the Airport Rail Link, which the government has indicated will be delayed by at least four years.

Mr Pallas said that was due to the "stand-off" with the airport over the station's design that was unlikely to be resolved soon.

Melbourne Airport, which has long advocated for an underground station rather than one above ground, responded to Mr Pallas's comments shortly after the budget was handed down.

"Melbourne Airport was part of a consortium that offered up to $7 billion towards an underground airport station and express tracks from Sunshine," a spokesperson for the airport said.

"The state government rejected this. The timing of the project has always been a matter for government."

On Tuesday night, a Victorian government spokesperson said the airport's previous consortium proposal was a "terrible deal" for Victorian taxpayers.

"The proposal would have privatised the Geelong line for 40 years and charged Victorians a fee to access their own rail services," they said.

"Even the former Federal Liberal/National government recognised that this $20 billion proposal did not stack up."

A level crossing removal project for the busy Upfield train line, which runs through Brunswick in Melbourne's inner-north, has also been delayed until 2030.

But $996 million has been set aside to get ready to open the Metro Tunnel rail project and the West Gate Tunnel next year.

The budget also set aside $139 million in a bid to attract and retain more teachers in Victorians schools.

The measure includes $63 million to go towards the mental health and wellbeing of school staff.

Analysis: Victoria's 2024 budget dreams big and forgets debt

The budget allocated $211 million towards interventions aimed at preventing family violence and help victim-survivors.

This includes a further investment in the government's Respectful Relationships program, which has been rolled out at some schools.

But CEO of Sexual Assault Services Victoria Kathleen Maltzahn said the urgency of the situation should have prompted a greater investment.

Credit rating agency says 'thin' forecast surplus key to maintaining AA rating

Credit rating agency S&P Global Ratings downgraded Victoria's credit rating from AAA to AA in 2020 — the lowest of any state or territory in Australia.

The agency said this year's budget confirmed the government's accounts were in "large structural fiscal cash deficit".

"This is the highest among the Australian states and stems from successive operating deficits and its large capex [capital expenditures] since the pandemic hit in late fiscal 2020," the agency said in a statement after the budget was released.

"Debt to operating revenues has almost tripled since this time. Victoria's serviceability costs are also rising.

"On the flipside, we believe Victoria maintains strong access to global capital markets.

"This will allow the government to fund its budget and avoid any acute stress scenario, despite rising interest expenses and market volatility."

The agency said it expected Victoria's AA credit rating would be supported by the state's wealthy and diverse economy, but pressure on the rating could build if the "thin" operating surplus forecast in the budget was not achieved.

State Opposition Leader John Pesutto said the budget was a missed opportunity to make life easier for Victorians and change the direction of the state.

"With record debt, record interest, record taxes, service cuts and poorer outcomes, it's clear Labor cannot manage money and Victorians are paying the price," he said.

Economist says little 'wriggle room' for government if 'things turned sour'

RMIT economist David Hayward said the Victorian government had handed down "another generous budget".

"It's surprised me how much the government has chosen to spend on new output … this is a big-spending budget again," Dr Hayward said.

"The risk with the budget is that they haven't really got much wriggle room if things turned sour.

"I think that what they're betting on is that people will prefer to see the extra spending on things that matter most to them.

"If things do turn sour it might be a different story."

Monash University economist Zac Gross said the budget had demonstrated some spending restraint, but a sustained effort was needed in the coming years.

"Debt payments are reaching record levels," Dr Gross said.

"We are on track as a state to spend more on interest payments than we do on transportation or social services.

"If we want to avoid that fate, we need spending restraint not just today, but for the next few budgets to come."

Worker shortages drive delays across mental health, pre-prep programs

The government will also scrap the COVID-era sick pay guarantee, which was introduced to assist casual workers who needed to isolate while unwell.

As recently as last year, the government had considered extending the scheme permanently through an industry levy, but the budget papers confirmed it would be discontinued.

The government said difficulty in finding workers had also forced it to push back delivery timelines for its pre-prep programs in some areas.

Workforce shortages were also cited as the main reason for the government delaying the rollout of 35 planned walk-in mental health clinics.

Budget papers stated Victoria could not find the additional 2,500 psychologists, psychiatrists and mental health nurses needed to support the services.

But the government is still injecting $10 billion into the healthcare system, including $1.4 billion to progress the delivery of upgrades at the Austin Hospital, Monash Medical Centre and Northern Hospital in Melbourne.

The government has also moved the proposed expansion of the Royal Melbourne and Royal Women's hospital site from Arden to the existing location in Parkville.

The plan to build a new hospital campus near the soon-to-open Arden station was announced in 2022, but according to budget papers, has been deemed "unviable" due to "electromagnetic interference" from trains.

In regional Victoria, $5.4 million has been set aside to build a mental health, alcohol and drugs hub at the Ballarat Base Hospital's emergency department.

Increase in fire services levy and tip fees

The state budget did not contain any major new tax hikes — a move welcomed by the Victorian Chamber of Commerce and Industry.

But the government is asking ratepayers to contribute more to the state's finances through an increase to the fire services property levy.

From July, the median residential property owner will pay an additional $35, while primary production properties will face a $150 rise.

It's also increased the state's waste levy, which currently sits at $129.27 per tonne for metropolitan industrial and municipal waste left at the tip.

From July next year, it will increase to $169.79 per tonne.

The government says a "proportional" increase will also be applied at rural landfills, which attract lower levies than those in the city.

The budget figures also highlighted the extreme difficulty faced by young Victorians seeking to own a home in the state.

Budget analysis highlighted that in the mid-1990s, the average Victorian house price was roughly 3.5 times average household incomes.

But in the last few years, that ratio has doubled, recently peaking at seven times average incomes.

It means the average time taken for 25 to 34-year-olds to save for a deposit has risen from five years in the mid-90s to seven or eight years more recently.

In recognition of this, the government has set aside $700 million for a one-off extension of its Victorian Homebuyer Fund, where it assists homebuyers by taking a stake in the purchase.

But this will be the final investment in the program, before it is replaced by the federal government's Help to Buy scheme.

How Victoria's budget has been received

Victorian opposition:

· Accused the government of a decade of financial mismanagement

· Criticised the government for cutting important services while still spending big on infrastructure projects

· Found regional households will be hit by increases to fire services and waste levies

Victorian Greens:

· Labelled it a "do-nothing" budget that will make the housing crisis worse, with nothing for renters and no investment for new housing

· Suggested the government should have imposed more taxes on banks and corporations to fund housing and cost-of-living relief

American credit rating agency S&P Global Ratings:

· Kept Victoria's credit rating at AA — the lowest rating of any state or territory in Australia — because of its "large structural and fiscal cash deficit"

Royal Australian College of General Practitioners:

· Welcomed $10 million to ease the state's patient tax, but say it's not enough to help people with the rising cost of seeing their local doctor

The Royal Australian and New Zealand College of Psychiatrists:

· Alarmed at a lack of investment in mental health

Community Housing Industry Association:

· Urged much more action to ease Victoria's housing crisis but welcomed a standalone tax exemption for land used for social housing

Small Business Australia:

· Slammed the budget as a "whole lot of nothing" for small business owners

Independent Schools Victoria:

· Criticised the government for unfairly discriminating against parents with children at private schools by excluding the majority of them from the School Savings Bonus