Victoria's higher than expected $316 million surplus will make major projects more affordable and borrowing money easier, the state government says.
The surplus was significantly more than the predicted $177 million for 2012/13, but the opposition says it is because Victorians are being taxed more than ever.
Unions say the surplus has come at the expense of jobs while Victoria's peak business group says it demonstrates the strength of Victoria's economy.
Two large windfalls for the state government - one from the State Electricity Commission of Victoria and one from land it received free of charge from VicRoads and Public Transport Victoria - helped boost the bottom line.
Treasurer Michael O'Brien said the result would allow Victoria to moderate its debt and borrow money at cheaper rates.
"That means that our infrastructure program is something which is more affordable and it means that you can bring forward projects more quickly than you might have otherwise done," he told reporters on Monday.
Acting Opposition Leader James Merlino said the surplus came from cash grabs and one-off revenue windfalls.
"Denis Napthine is taxing Victorians more than ever," he said.
"He is the highest taxing premier in the history of our state."
Unions say the surplus is built on reductions to the budgets of vital services and job cuts.
United Firefighters Union secretary Peter Marshall says fire services are in crisis after the budgets of the CFA and MFB were cut by $66 million, a claim denied by the government which says it has increased funding.
The Community and Public Sector Union said the surplus follows 6000 government job cuts.
Victoria's peak business body VECCI said the result showed Victoria's economic resilience despite challenging economic conditions at home and abroad.
Premier Denis Napthine said expenditure growth of 2.1 per cent for the financial year was significantly lower than the average rate in the decade to 2009/10 under the previous Labor government.
"Our surplus, combined with substantial investment infrastructure, confirms the coalition government has the right strategies in place to manage the Victorian economy," Dr Napthine said.
He said the surplus came at the same time as the government was delivering record funding for health services and schools.
Mr O'Brien said while other governments around the country were either in deficit or forecast to go into deficit, Victoria's economy was strong.
He said the average unemployment rate was 5.6 per cent, slightly lower than the forecast 5.75 per cent, Mr O'Brien said.
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