Labor reckons every one of its election promises will be kept in the Victorian budget but the predicted surplus has been slashed almost in half.
The previous government had promised a $3 billion surplus in 2015/16 while Labor promised $2.2 billion, only to revise that down to $1.2 billion on the eve of Tim Pallas delivering his first budget.
The shrinking surplus is due to an overly-ambitious savings target the coalition government set, Mr Pallas says.
"Whilst the previous government talked a good fight about reducing expenditure to 2.5 per cent, they never did," he said on Monday.
"They never actually demonstrated they had a capacity to do it and it would have come at a considerable cost to Victorians."
Labor has also wiped off $4 billion from surpluses in the forward estimates of Tuesday's budget.
Apart from the surplus, Mr Pallas said all of Labor's election commitments would be delivered, which include new road projects, level crossing removals and 400 new custody officers.
Unions fought hard to help Labor win the election and will argue for higher pay in return, but Mr Pallas said he expected public sector wage rises to sit between 2.5 to 3 per cent a year.
"We believe (that's) appropriate given the current economic settings, given the wages policy we've adopted," he said.
Opposition Leader Matthew Guy said the fact the surplus had already been raided showed this would be a typical Labor budget.
"It always starts with a bit of cash and a lot of goodwill, and it always ends in tears," he said.
Premier Daniel Andrews earlier announced a $2 billion budget spend on building 100 new trams, 100 metropolitan trains and a large expansion of the regional train fleet.
The multi-billion investment will provide greater certainty to rolling stock manufacturers and suppliers, which employ up to 10,000 people in Victoria, Mr Andrews said.
Mr Andrews ruled out using the 2011 business case for the $11 billion Melbourne Metro Rail tunnel, which recommended hikes in train and tram fares, car registration and car parking fees.
Mr Pallas said there were no plans to hike fees to pay for the tunnel, which the government has set aside $1.5 billion for, with another $3 billion ready to be borrowed.
He said a new business case would be finished later this year for the Metro project.
