Despite the large price tag, the government has only announced $224 million this year and another $70 million next year, to complete detailed planning, commence procurement and early works. Mr O'Brien said it would require $1.5 billion in federal money, which Tony Abbott has promised if he becomes Prime Minister, and investment from the private sector. Victorian Treasurer Michael O'Brien. Credit:Michael Clayton-Jones Citylink operator Transurban is likely to be asked to contribute to the cost of the East West Link project because of expected traffic increases on CityLink. He said the project would be put out to market this year with work to begin in 2014 - the state election is in November 2014.

In a budget predicting a string of rising surpluses over the next four years, Mr O'Brien also announced cash for other major projects, including the Monash Children's Hospital and the Eye and Ear Hospital. But he said the Government would not disclose the value of the projects so the government could get best value from the private sector. The government will make more announcements about the tunnel this week but says there will be no off-ramps into the city but some houses at the end of the road may be acquired to make way for the project. Earlier on Tuesday, Mr Abbott said he was confident that the budget would "give us a clear path forward for the East-West Link which is the most important bit of infrastructure that Melbourne, in particular, but Victoria in general, needs right now’’. As previously reported, the government delivered a $225 million surplus with surpluses forecast to reach $2.5 billion by 2016-17.

Overall the budget is worth about $50 billion. "Net debt is forecast to be 6.4 per cent of Gross State Product (GSP) in 2013-14, declining to 5.4 per cent by 2016-17,'' Mr O'Brien said. "Without decisive action by the Coalition Government net debt would have soared to around 17 per cent of GSP by 2017. This would have cast an enormous shadow over our state economic future.'' Mr O'Brien said the government would use surpluses to fund infrastructure projects. Other economic forecast include:

Unemployment forecast to drop to 5 per cent in 2015-16, down from 5.5 per cent this year.

GST revenue projected to grow by 2.5 per cent in 2013-14. It is projected to increase to an average of 6.5 per cent a year over the next four years.

Revenue expected to grow by 4.6 per cent, with an expectation that revenue will grow at an average of 4 per cent over four years.

State tax expected to grow by 5.3 per cent "driven by the expected recovery in payroll tax and land transfer duty."

The state's net debt is set to expect to peak at 6.6 per cent, of $25 billion, in 2014/15 before declining to 5.4 per cent of $22.7 billion in 2016/17.

Land transfer duty is expected to grow by 9.1 per cent

The government is banking on road fines increasing to $325 million this year, up from $287 million, with total fines up to $714.9 million, from $699.4 million.

Victoria expects to get 22.6 per cent of the national GST pool

Payroll tax is expected to grow by 6.1 per cent in 2013-14 and by an average of 5.7 per cent a year over the four years. The budget also shows there will be $210 million worth of health cuts over the next four years, as the government invests more than $420 million in a scheme that allows private hospitals to bid for publicly-funded elective surgeries. Mr O'Brien's budget also gives $32 million for maintenance work on the already congested West Gate Freeway, part of a $64 million Commonwealth-State upgrade. Mr O'Brien would not commit to stage 2 of the East-West Tunnel from the City Link to the western ring road. He called on the Federal Government, and state opposition, to offer bipartisan support for the tunnel, saying Prime Minister Julia Gillard should not make the September election a referendum on the East-West Tunnel. The budget does not include any funding for DisabilityCare which the government signed onto last Saturday.

There is also no money allocated for the Gonski education reforms with $15.7 million given for teachers performance management. Both reforms are listed as specific fiscal risks. The budget does includes the teacher's long-awaited pay deal but does not place a dollar value on it. Only $10 million has been given to the Melbourne Metro Rail tunnel project - which Infrastructure Australia has listed as a higher priority than East West - with Mr O'Brien saying the project needed more work. The airport rail link and line extension to Rowville and Doncaster are contingent on the Metro project being completed.

Loading Gambling tax revenue is expected to grow due to a moderate increase in punter losses. The public sector will be asked to make more savings with the efficiency dividend increased from 2 per cent to 2.5 per cent.