The Victorian government has again called for a fairer slice of GST funding as it forecast a slightly revised down 2014/15 budget surplus.
The surplus forecast has been cut by $200 million to $1.1 billion for this financial year.
It will rise to an estimated $2.9 billion in 2017/18, down from the $3.3 billion forecast in the May budget.
Treasurer Michael O'Brien said the reduced surpluses were due to commonwealth funds received in 2013/14 for the East West Link road project, pushing future surpluses down.
The early receipt of the funds meant Victoria had a $2 billion operating surplus in 2013/14, exceeding the $935 million surplus forecast in the budget, the government said on Wednesday.
Mr O'Brien said the economy has been relatively stable since the May budget.
The latest economic update shows Victoria has maintained its triple A credit rating and forecasts strong surpluses over the next four years.
While it was a fragile time for state economies, Victoria was in a strong position compared to other states, Mr O'Brien said.
"Victoria clearly has the strongest finances of any state in the Commonwealth," he told reporters on Friday.
But he again pressed the need for a commonwealth review of the state's GST share, saying it was unfair Victoria continued to be short-changed compared to other states.
"We need to get some resolution on this," he said.
"Victorians cannot afford to keep receiving 88 cents in the dollar.
"It's just unfair."
Labor market conditions are expected to strengthen, with economic growth expected at 2.5 per cent in 2014/15 and 2.75 per cent from 2015/16.
Population growth is expected to remain strong, but moderate slightly.
The unemployment rate is forecast at 6.5 per cent in 2014/15, then 6.25 per cent in 2015/16.
"In terms of employment growth, we have done far better than other non-mining states," Mr O'Brien said.
The latest economic update also touches on discussions between Victoria and the Commonwealth to transfer ownership of the Australian Synchrotron national research facility to the Commonwealth for no consideration.
Mr O'Brien said there were significant costs to the state to maintain and operate the facility.
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