Victoria's economy grew steadily in 2013/14 amid challenging conditions, with the government's budget surplus reaching $2 billion.
The surplus is the biggest in 15 years, far exceeding the $935 million surplus forecast in the May budget.
The government said the increase was largely due to the early receipt of federal grant payments for the East West Link road project.
That was partly offset by a $540 million court-ordered payment to Tatts Group to compensate the gaming giant over a broken government poker machine contract.
Treasurer Michael O'Brien said the surplus supported record infrastructure investment in transport, health and education.
The 2013/14 financial report, tabled in parliament on Wednesday, said Victoria's economy grew steadily despite challenging conditions.
Population growth was strong over the year to December 2013, with the state experiencing the largest gains from net interstate migration in more than 30 years.
Demand for new housing also rose and employment expanded modestly.
State taxation revenue was $1.4 billion more than in 2012/13, party due to a higher stamp duty take, reflecting a stronger property market.
Mr O'Brien said the surplus meant the government was managing the state's finances well.
"Victoria is in good hands and as a consequence, we are able to afford the very ambitious infrastructure program this government is determined to deliver," he told reporters.
The state has already received $1.5 billion from the Commonwealth for the East West Link but if Labor ditched the project, the money would have to be paid back, Mr O'Brien said.
Dumping the project would cost the state potentially more than $1 billion and plunge the state into deficit, he said.
"The current budget forecasts for 2014/15 for the state is a $1.3 billion surplus. Just even returning the federal government's money would put us straight into deficit."
Mr O'Brien did not comment on plans for further tax relief, saying Victorians were already enjoying cuts made in the May budget to payroll tax, WorkCover premiums, the fire services property levy rates and the abolition of stamp duty on life insurance products.
Share
