Foreign property investors, luxury car buyers and public servants will bear the brunt of a steep decline in stamp duty revenue amid the sharpest 12-month fall in housing prices in Victorian history.

What's in the Budget? Victoria's state debt will more than double to fund $27.4 billion in suburban transport upgrades

Victoria's to fund Taxes for foreign property investors and absentee landowners will increase to match those in NSW

to match those in NSW Buyers of cars worth more than $100,000 face increased duties , with exemptions for low-emission cars and farming vehicles

Buyers of , with exemptions for low-emission cars and farming vehicles The public sector has been told to find $1.8 billion in efficiency savings , but the Treasurer said redundancies would be a last resort

The public sector has been told to find , but the Treasurer said redundancies would be a last resort Dental vans will provide free care to Victorian state school students at a cost of $322 million

at a cost of $322 million The Government's solar panel rebate scheme will be expanded, including to renters, at a cost of $1.3 billion

Fresh from Labor's thumping election win last November, and three and a half years out from the Government's next electoral test, Treasurer Tim Pallas's Budget shows state debt will more than double over the next four years to fund a $27.4 billion "suburban transport blitz".

This includes $15.8 billion to fully fund the North East Link, and $6.6 billion to make good on an election promise to remove a further 25 level crossings, which would bring the total number of crossings removed since the Andrews Government took office to 75.

The infrastructure spend has resulted in belt-tightening elsewhere, with the Government demanding the public service find $1.8 billion in savings through efficiencies to free up money to spend on priority areas.

Mr Pallas said it would be up to departments to decide how to save the money and the process would be overseen by the secretaries of the departments of Premier and Cabinet, and Treasury and Finance.

He said forced redundancies would be a last resort.

The Budget includes plans for new trains, platform upgrades and track extensions. ( ABC News: Danielle Bonica )

Mr Pallas had promised a "budget of hard choices" and was asked in the budget lockup which decision had been the toughest.

He nominated the $1.8 billion efficiency dividend, and the Government's hardball approach to negotiating enterprise agreements with public sector workers, including early childhood workers, firefighters and public transport workers.

The Government has offered these workers an annual increase of 2 per cent, a proposal which has been rejected by unions.

Mr Pallas said as someone who had worked in the union movement for 25 years, he had not relished lowering pay expectations, but added: "It's important that we keep a steady hand and recognise that we can only provide what we have the capacity to."

Debt expected to rise above $50b

Net debt, which is projected to reach $22.8 billion in the current financial year, is forecast to balloon to $54.9 billion by 2022-23.

Victoria's net debt is expected to climb to more than $50 billion by 2023. ( ABC News: Shane Willner-Browne )

With a busy program of ambitious projects, including the Melbourne Airport rail link and the suburban rail loop, Mr Pallas said debt as a proportion of the Victorian economy would continue to grow beyond this period, to peak at 12 per cent of gross state product.

Mr Pallas said these projects were vital for the state to cope with population growth.

The Budget forecasts a surplus of $1 billion for 2019-20, growing to $1.5 billion in 2020-21, $3.9 billion the following year and $4.9 billion in 2022-23.

The Budget forecasts a surplus of just under $5 billion by 2023. ( ABC News: Shane Willner-Browne )

Shadow Treasurer Louise Staley said the Budget contained a "trifecta of economic mismanagement".

"This is not the budget that Victorians have been wanting, or needing — they certainly don't want to see additional taxes and a lot of these taxes are exactly the kind of taxes that Australians just rejected when they rejected Bill Shorten."

More than $2b to boost train services

In a Budget dominated by the commitments Labor made during the state election campaign, one fresh announcement is $2 billion to upgrade the Sunbury line to enable higher-capacity trains to run on one of Melbourne's busiest lines.

Platforms will be extended at 10 stations on the line.

The Government says the upgrade will create room for an extra 113,000 passengers to travel on the line during peak times every week.

Accessibility upgrades will also be made at eight of those stations to make it easier for people in wheelchairs to board.

Ten more low-floor E-Class trams will be built at a cost of $163 million and the Budget has committed $150 million towards new car parks at the state's busiest train stations.

The North East Link project, which will include a Yarra River Bridge, will get nearly $16 billion. ( Supplied: Victorian Government )

Free mobile charging points will be installed at Richmond, South Yarra, North Melbourne and City Loop stations.

There is also $750 million to duplicate the Cranbourne line, in the city's south-east, to allow trains to run to the city from every station every 10 minutes during the peak.

On the Hurstbridge line, 4.5 kilometres of track will be duplicated and new stations will be built at Greensborough and Montmorency.

Infrastructure investment is expected fall by 2022, after peaking at just under $15 billion. ( ABC News: Shane Willner-Browne )

Away from the city, 18 new V/Line VLocity trains, with a price tag of $340 million, will be shared between the Albury, Ballarat and Geelong lines.

As promised during the campaign, three new stations will be built in and around Bendigo — at Goornong, Raywood and Huntly — and a station will be re-established at Harcourt.

Foreign property investors face tax hike

The tax paid by foreign property investors will be increased from 7 to 8 per cent from July 1, bringing Victoria's rate into line with that of New South Wales.

The tax paid by absentee landowners will be increased from 1.5 per cent to 2 per cent, also in line with NSW.

A drop in stamp duty revenue has affected the projected Budget surplus. ( AAP: Tracey Nearmy )

A land tax exemption will be abolished for land that is next door to a person's home but on a separate title and without a separate residence.

The Government says the removal of the exemption is designed to discourage land banking.

Mr Pallas defended the tax increases in the Budget, saying they were targeted at people who had the capacity to bear a greater tax burden.

"We see this as being progressive, as being fair," he said.

The reaction: Three-year-old kinder , free dental care for kids and 1,000 new public housing dwellings have been welcomed by the Victorian Council of Social Service

, and have been welcomed by the Victorian Council of Social Service The increased stamp duty for foreign investors has been slammed by the Property Council of Australia, which called it an "own goal"

The has been slammed by the Property Council of Australia, which called it an There has been a mixed response from business , with the Victorian Chamber of Commerce and Industry welcoming changes to payroll tax , but saying they should come sooner

There has been a , with the Victorian Chamber of Commerce and Industry welcoming , but saying they should come sooner The Australian Industry Group gives the Government "a bronze medal" for delivering on election commitments but not on industry demands like tackling a "recycling crisis" , supporting electricity generation in regional areas and addressing skills shortages

The Australian Industry Group gives the Government for delivering on election commitments but not on industry demands like , supporting and Trades Hall gives the Budget "a gold medal for infrastructure" , but said there was room to give wage rises to public sector workers

Trades Hall gives the Budget , but said there was room to give wage rises to public sector workers The RACV calls the Budget a "a positive one" , but was disappointed by the tax hike on luxury vehicles

The RACV calls the Budget a , but was A 1.6 per cent increase in funding for public schools and funding for school upgrades and new schools has been welcomed by the Australian Education Union, but it says a new state-federal funding agreement needs to be signed

A and funding for has been welcomed by the Australian Education Union, but it says needs to be signed The Council to Homeless Persons says it is "delighted" by continuing funding to the private rental assistance program and new public housing, but it is still struggling to find affordable housing

The Council to Homeless Persons says it is by continuing funding to the and new public housing, but it is still A $173 million commitment for new mental health funding has been welcomed by Mental Health Victoria

Revenue forecasts from stamp duty have been revised down by $5.2 billion since last November, as the property market softens as a result of tighter lending.

Mr Pallas said over the past year Victoria had experienced the biggest 12-month decline in property prices in the state's history.

Property prices in the state had fallen by about 10 per cent over the past year, while the volume of transactions had declined by about 15 per cent over the same period, Mr Pallas said.

He said while he expected prices to continue to fall for at least 12 months, the rate of decline had decelerated, and with an interest rate cut on the horizon and regulators easing lending restrictions, there were "green shoots" that pointed to a recovery.

The Budget has forecast steady growth in stamp duty revenue from 2020-21.

Luxury car owners slugged

Currently, for all cars worth more than $66,331, a duty of $10.40 is charged for each $200 of the car's market value.

From July 1, higher rates will be introduced to cars worth more than $100,000.

Passenger vehicles worth between $100,000 and $150,000 will be charged a duty of $14 per $200 of value, while cars valued above $150,000 will be charged a duty of $18 for each $200 of value.

Low-emissions cars, caravans, motorhomes and cars used by farmers in the business of primary production will be exempt.

Luxury car buyers will be hit with increased duties from July 1. ( ABC News: Ingo Helbig, file photo )

Mr Pallas said the Government was raising revenue in a manner that would "not substantially distress the broader community".

"If you can buy a $200,000 Maserati, you're not going to be particularly fazed by a slight increase in the rate of vehicle duty that you have to pay."

The other motorists lining state coffers will be those who fall foul of road safety cameras.

The Government expects to collect $390 million this financial year (2018-19) in fines from the cameras.

Revenue from camera fines is expected to increase by nearly $140 million by 2023. ( ABC News: Shane Willner-Browne )

It expects annual revenue from the fines to grow steadily every year and reach $529 million by 2022-23.

Over the same period, revenue from police on-the-spot fines is projected to grow from $155 million to $173 million a year, while toll road evasion fines are expected to grow from $103 million to $130 million a year.

Kindergarten and dental care pledges funded

The Budget makes good on a string of campaign promises, including $882 million to start the rollout of 15 hours a week of subsidised kindergarten for all three-year-olds.

The rollout will start next year in six regional local government areas — Buloke, Hindmarsh, Northern Grampians, South Gippsland, Strathbogie and Yarriambiack — before being expanded more broadly.

The Government has promised every three-year-old Victorian child will have access to at least five hours per week of kinder by 2022.

All Victorian Government school students will get free dental care at a cost of $322 million, with the first school dental vans expected to hit the road later this year.

The Government says the service will save families about $400 a year per child on dental costs.

The Budget contains almost $300 million for more paramedics, ambulances and ambulance stations.

There is $214 million for measures to support new parents, including Finnish-style "baby bundles" of essential items, seven new parenting centres and an extension of sleep assistance services.

Footscray will get a new hospital at a cost of $1.5 billion.

Government promises 'constructive' work with PM

The State Budget was originally scheduled for April 30, but was postponed until after the federal election due to what Mr Pallas called the "starkly contrasting offerings" from the two major parties.

Mr Pallas said the State Budget was about $2.6 billion worse off as a result of Scott Morrison's election victory, principally due to federal Labor's $2 billion commitment to the Metro Tunnel project, which was not matched by the Coalition.

Bill Shorten had promised $10 billion towards Daniel Andrews's plans for a suburban rail loop in Melbourne had federal Labor been elected. ( AAP: Tracey Nearmy )

"My party on election night was not as much fun as I think Josh Frydenberg's was," Mr Pallas said.

But he said the State Government had moved on from the result.

"The Australian people have made their decision … we'll work as constructively as we can with them [the Morrison Government]."

Solar panel program expanded

The Government's existing scheme to provide rebates and zero-interest loans for solar panels, hot water systems and batteries will be expanded, including to renters, at a cost of $1.3 billion.

The Essential Services Commission will get an extra commissioner, dubbed "an energy cop on the beat" by the Government, to prosecute misbehaviour by energy retailers.

The civil penalties for retailers who wrongfully disconnect customers will increase to $250,000 and the criminal penalties for misleading or deceiving customers will rise to $1 million.