Handing down her second budget on Tuesday before the November state election, Victorian Treasurer Jaclyn Symes narrowly avoided posting a $200 billion net debt projection.
Net debt is instead expected to hit $175.6 billion by the end of next financial year and top $199.3 billion by mid-2030.
By that point, annual interest repayments are forecast to rise to $11.8 billion, equating to more than $32 million a day.
Victoria's operating surplus for 2026/27 was shaved from $1.9 billion to $1 billion.
There were no other major cost-of-living relief measures left to announce after Premier Jacinta Allan splashed billions of dollars in the lead-up budget day, including on free and half-price public transport and discounted car registration.
Ms Symes described it as a constrained and responsible Labor budget to make life "easier, safer and more affordable for every Victorian".
"This budget confirms Victoria's first operating surplus in seven years, the only surplus on the eastern seaboard," the treasurer said in her address to parliament.
Treasury expects Victoria to post operating surpluses totalling $6.8 billion over the next four years but forecasts more than $30 billion in cash deficits in that span.
While Victoria's fiscal performance was "gradually improving", S&P Global Ratings analyst Rebecca Hrvatin said fiscal cash deficits remained structurally large.
The credit ratings agency believes additional spending might not be fully captured in the budget, including election campaign commitments and upcoming wage agreements.
"We believe Victoria's economic assumptions have downside risks," Ms Hrvatin said.
"For instance, Victoria's oil and gas price forecasts are lower than ours, and they assume a faster normalisation following the war in the Middle East.
"A more prolonged disruption could undermine the government's fiscal forecasts through higher interest rates, lower consumption, and higher unemployment."
Victorian Chamber of Commerce and Industry chief executive Sally Curtain said the scale of debt and weak growth would likely dent investor confidence.
"It raises more questions than answers," she said.
Victorians needed to understand the real-life consequences of surging debt, Opposition Leader Jess Wilson said.
"Next year Victorians will be paying an interest bill that could pay for police, ambos and kindergartens and leave spare cash left over," she told reporters.
The coalition has committed to slash five taxes and drive down debt, if it returns to power for the first time since 2014.
But Ms Wilson is yet to explain where she would find the money, beyond vowing to cut funding as part of the state's treaty with Aboriginal people.
The budget contained no new taxes.
However, a 40-year extension of Victoria's lottery licence will deliver a $1.1 billion windfall, offsetting falling poker machine revenue following the introduction of mandatory carded play.
Revenue from stamp duty is forecast to fall by almost $900 million next financial year due to a declining property sales stemming from higher interest rates, Ms Symes said.
Despite the Allan government committing to cut more than 1000 public service jobs, treasury estimates employee expenses will rise to $45.5 billion by 2029/30.
Extra money to be spent on an increased pay offer for public school teachers, mooted to be 28 per cent rise over four years, is expected to come from contingency funding.Â
VICTORIAN BUDGET SNAPSHOT 2026/27:
* Net operating surplus: $1 billion in 2026/27, $2 billion in 2029/30
* Net cash deficit: $7.7 billion in 2026/27, $8.1 billion in 2029/30
* Employee expenses: $41.1 billion in 2026/27, $45.5 billion in 2029/30
* Infrastructure spending: $19.4 billion in 2026/27, $15.3 billion in 2029/30
* Net debt: $175.6 billion in 2026/27, $199.3 billion in 2029/30
* Interest repayments: $8.9 billion in 2026/27, $11.8 billion in 2029/30
* Unemployment: 4.75 per cent in both 2026/27 and 2029/30
* Economic growth: 1.5 per cent in 2026/27, 2.5 per cent in 2029/30
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