The Victorian government has defended plans to press on with major projects amid soaring debt, declaring it will bear fruit for future generations.
More than $200 billion worth of Victorian infrastructure projects are under way and Tuesday's state budget set aside an extra $9.3b for new works.
Latest forecasts show the state will spend $19.6b a year on average to build infrastructure over the next four years, four times more than the 10-year average to 2014/15.
Despite the government unveiling a $31.5b COVID-19 debt repayment plan, global ratings agency S&P warned record spending on Victoria's big build will ensure the state's cash deficit remains large.
Premier Daniel Andrews denied his government should have scaled back infrastructure spending to make a bigger dent in net debt, which is forecast to top $171.4b by mid-2027.
"They're projects and programs that Victorians voted for," he told reporters on Thursday.
"If you don't build a world-class public transport system as we hurtle along to becoming Australia's biggest city, then our quality of life will be fundamentally compromised."
The 2023/24 budget papers show there was a 0.3 per cent rise in estimated costs on government-funded projects over the past 12 months, representing an extra $565 million.
Estimated timelines have blown out by 21 per cent as labour shortages and global supply supply chain issues bite.
Victoria's spending on infrastructure is forecast to taper off in coming years as the future of 32 major projects remain under a cloud.
Melbourne Airport Rail, Geelong Fast Rail and North East Link were among projects with no completion dates or allocated funds listed in the budget because of a 90-day federal infrastructure review.
In a budget address to the Committee for Economic Development of Australia on Wednesday, Treasurer Tim Pallas conceded one or two projects caught up in the review could "disappear".
But the long-awaited rail line to link Melbourne Airport with the CBD isn't one of those.
"Certainly, from our perspective, Melbourne Airport Rail is an important project and it should proceed," Mr Pallas told the crowd.
It comes as the Real Estate Institute of Victoria warned rental supply will drop further in light of incoming land tax changes, with landlords already moving to have their properties appraised for sale.
From January, property investors will pay a fixed $500 fee each year for landholdings worth between $50,000 to $100,000, $975 if above $100,000 and an extra 0.1 per cent for every dollar above $300,000.
It will mean 860,000 investment, holiday home or business property owners pay $1300 a year on average in extra tax, raising $4.7 billion over the next four years to pay off pandemic-related debt.
The government should be incentivising people to invest in property to boost rental supply rather than hiking up taxes, real estate institute chief executive Quentin Kilian said.
"The land tax levy ... is not a long term solution for stamp duty replacement due to its disproportionate impacts," Mr Kilian told a parliamentary inquiry.
The treasurer has left the door ajar for a rental cap but Mr Andrews declined to speculate before his government releases a housing and planning strategy statement in September.
Opposition Leader John Pesutto said limiting rental prices would hurt the one third of Victorians with an additional property who earn less than $100,000 a year.
"Daniel Andrews and his government are punishing hope," he said.
