The stakes will be high when Victorian Treasurer Jaclyn Symes delivers her second state budget on Tuesday, the last before voters head to the polls in November.
In the lead up, Premier Jacinta Allan has unveiled billions of dollars in election-year sweeteners and confirmed the 2026/27 budget will show net debt falling as a percentage of the state economy.
The budget papers will forecast operating surpluses of $700 million for this financial year and $1 billion surplus next financial year, $900 million less than projected in December.
Over the next four years, Victoria is expected post average annual operating surpluses of $1.7 billion.
"We can afford to provide cost-of-living relief right now because our economy is growing and our budget is in surplus," Ms Allan said.
But budget-watchers have been warned not to confuse the net operating balance, which includes federal government grants and excludes all spending on capital infrastructure projects, as a cash surplus.
While Victoria's mid-year budget update forecast operating surpluses of $6.6 billion across the four years to mid-2029, cash deficits were predicted to total $31.9 billion over the same period.
"The bottom line is that until you start running cash surpluses, you can't begin to repay debt - indeed you can't stop adding to debt," independent economist Saul Eslake told AAP.
"The focus on the net operating balance does egregiously misrepresent the true state of the Victorian budget ... don't let Jaclyn Symes and Jacinta Allan get away with this misleading presentation."
Victoria is expected to accrue $192.6 billion in net debt by mid-2029, sending the state's daily interest bill soaring past $28 million.
Mr Eslake said the cash deficits were primarily responsible for the forecast $41.7 billion increase in net debt over the forward estimates and criticised the government's recent round of "untargeted cash handouts".
"Contrast Victoria's approach with NSW's, which isn't doing any of this stuff because ... of the likely impact on its budget," the former ANZ chief economist said.
"That gives you as good an insight as any into why NSW's finances are in much better shape than Victoria's or Tasmania's ... of course NSW isn't facing an election in the next six months."
Opposition Leader Jess Wilson said the Allan government had not explained how it was planning to pay for its "big spending" commitments and Victorians would ultimately pay with higher interest repayments.
The pre-budget spending spree on measures such as cheaper public transport and car registration have also attracted the attention of global credit rating agencies.
Victoria's credit rating is classed as AA - the equal lowest of any Australian state or territory with Tasmania and the ACT - by S&P, as well as AA2 by Moody's and AA+ by Fitch.
All three agencies list Victoria's outlook as stable.
The outlook relies on the state continuing to deliver operating surpluses, hinging on credible cost controls ahead of the November election, S&P Global Ratings analyst Rebecca Hrvatin said.
"The recent announcements around free/discounted public transport and vehicle registration rebates are further examples of temporary spending that could prove hard to unwind," she said.
"These could weaken the state's fiscal metrics without offsetting measures."
A sustained weakening in fiscal metrics could also weigh on Fitch's rating if it leads to a materially faster rise in debt than expected, its senior director of international public finance Paul Norris added.
Credit rating downgrades make it more expensive for governments to service debt, leaving less money to spend on critical services and infrastructure such as hospitals, roads and schools.
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