The Victorian Government has detailed plans to spend $22 billion on infrastructure over four years and create 100,000 new jobs, in the first budget unveiled by Premier Daniel Andrews and Treasurer Tim Pallas.

The budget also has a strong focus on education, allocating $3.9 billion over four years for school education and TAFE.

The Government said the budget included record funding for public transport and a significant boost for health.

It delivers a $1.2 billion surplus for the next financial year, and projects state debt to be reduced to 4.4 per cent by 2019.

Mr Pallas said the budget was focused on Victorian families.

"This budget delivers on 96 per cent of the commitments the Government gave to the people of Victoria at the last election," the Treasurer said.

"The key for this budget is being able to demonstrate to Victorians that we are genuine about the commitments we gave to Victorians."

Education funding 'meets Gonski obligations, picks up shortfall'

As expected, the budget had a strong focus on education spending, with a planned $3.9 billion in spending over four years.

The Government allocated an additional $805 million to increase Victoria's share of the Gonski agreement for the 2016 and 2017 school years.

Funding for the 2018 and 2019 school years remains in doubt, because the Federal Government has not committed to it.

Treasurer Tim Pallas rejected suggestions the Gonski funding was still well short of what was promised when the deal was signed in 2013.

"We're committed to the Gonski agreement and its principals," he said.

"We will put the resources in not only to meet our Gonski obligations, but to pick up the shortfall created by the former government."

The budget also includes significant funding for school infrastructure.

A total of $730 million will be allocated over four years to rebuild rundown schools, plan and build new schools in growth areas and replace dangerous asbestos school buildings.

The Government has also delivered on its promise to help disadvantaged students with $1.5 million this financial year to provide breakfasts for students and other initiatives to help cover the cost of schooling.

Mr Pallas said he was proud of the budget's focus on education.

"The 2015-16 budget is a budget for families," he said.

"It gets on with the projects our state needs and it puts people first."

About $350 million will be spent on the TAFE sector, including the so-called TAFE rescue fund which will pay to reopen closed TAFE campuses.

'Record public transport spending'

The Government said this budget contained "record" spending on public transport.

It included $1.5 billion over four years to begin work on the Melbourne Metro rail project, including a tunnel under Swanston Street and five new CBD stations.

There is also $2 billion to order new trains and trams for Melbourne and regional Victoria.

Mr Pallas said spending on public transport in this budget was 41 per cent higher than in the previous budget.

"This Government is getting on with the project our state needs so people can get home to their families safer and sooner," he said.

The budget allocated $2.4 billion over four years to remove level crossings, as part of the Government's plan to remove 50 in eight years.

Mr Pallas said he expected at least four level crossing removals to be completed by the end of the coming financial year.

"We expect that on average that we would do about eight [level crossings] a year," he said.

"As you crank up this capital work program you get more and more done."

Victoria's finances and jobs growth

The budget predicts a surplus for the 2015-16 financial year of $1.2 billion, rising to $1.8 billion by 2018-19.

The budget surplus is $1 billion lower than the projections made by the former Coalition government.

Mr Pallas said the budget struck the right balance between spending on essential services and keeping the economy strong.

"Three per cent expenditure growth remains under our revenue growth at 3.4 per cent," he said.

Mr Pallas said the budget would reduce net debt from its June 2014 peak of 6 per cent of gross state product, to 4.4 per cent by June 2019.

Treasurer Tim Pallas said the 2015 state budget has "fairness at its heart and families in its reach". ( ABC News: Stephanie Anderson )

"This is a responsible level of net debt and it's lower than estimated," he said.

The budget papers predicted Victoria's unemployment rate would drop to 5.75 per cent in 2018-19.

The budget also included $508 million for the Premier's Jobs and Investment Panel, which will allocate funding to specific areas of jobs growth with the aim of creating 100,000 jobs in four years.

Mr Pallas said the panel was critical to helping Victoria's economy transition in uncertain times.

"It's about changing the way we do the provision of funding for job creation," he said.

The dividends taken from the state's water corporations will increase

The budget does not reveal how much it is expected the Government will raise from the privatisation of the Port of Melbourne.

Health, Law and Order also feature

The budget also included $560 million over four years for new and upgraded hospitals across the state.

It also featured $59 million to help cut emergency department wait times and funding to tackle the elective surgery waiting list.

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As promised, the Government will spend $200 million over four years to reopen hospital beds that are currently closed, covering the cost of extra staff.

The budget also allocated $148 million to recruit specialist custody officers to watch prisoners being kept at local police station lock ups.

The Government said the initiative would free up 400 police officers, allowing them to be redeployed to frontline duties.

Budget surprises: Mernda rail line shortfall

The Victorian budget is relatively predictable, delivering on key policies the Government made before the election last November.

However there were some areas where funding was lower than promised.

The Government promised up to $600 million to extend the rail line to Mernda, but this budget only included $9 million over four years for planning.

Mr Pallas said the Mernda Rail extension would go ahead and be funded in future budgets.

"The money for Mernda is for planning to make sure we know what we're building and how much it costs," he said.

"I have a great ambition to make sure that when we sign up for things we get the design right."

The budget also includes up to $210 million to expand the Melbourne Convention and Exhibition Centre, which is struggling to keep up with demand.