Victoria's public service is bracing for its funding to be slashed despite the government vowing hard-working families will not suffer to pay off mounting debt.
Treasurer Tim Pallas will hand down his ninth budget on Tuesday and has flagged it will be difficult as net debt spirals to new heights.
Latest forecasts project net debt will rise to $165.9 billion by mid-2026, accounting for 24.6 per cent of state revenue.
Deputy Premier Jacinta Allan declared the budget would deliver on Labor's 2022 election promises and pay down COVID-related debt, calculated to be at least $35.8b by the treasury department.
But she promised households will not have to foot the bill amid the cost-of-living crisis.
"This will not be something placed on hard-working families who've already gone through a really difficult 12 months with 11 interest rate rises," she said on Monday.
Victorian Community and Public Sector Union secretary Karen Batt has requested Ms Allan qualify or retract her comments, or apologise.
"The deputy premier has implied the public sector is either not being cut, or we're not hardworking, or she reckons they don't have families," she told AAP.
"It's sad the narrative is we borrowed to save jobs but now we're cutting jobs to save borrowings."
Government departments have been told to prepare to cut 10 per cent of ongoing staff to help return the budget to surplus, according to the union.
Mr Pallas last week refused to rule out public service cuts as the government faces a forecast wage bill of $35.8b by mid-2026, up from $33.1b this financial year.
It's tipped the treasurer will announce the state's books will be back in the black by the 2025/26 financial year, posting an improved $1b surplus before another of $1.2b for the year ending June 2027.
In a bid to save cash, the Victorian government is overhauling the WorkCover scheme and could revise timelines for the jointly funded Melbourne airport and Geelong rail projects.
Premier Daniel Andrews has previously flagged the budget will include more support for first-home buyers and hinted stamp duty was unlikely to be replaced with a broad land tax.
