Big businesses, holiday-home owners and landlords will be asked to foot the bill for the Victorian government's COVID-19 debt, as part of a 10-year fiscal repair plan unveiled in the state budget.

Some jobs in the public service will also be slashed, with between 3,000 and 4,000 corporate and office staff set to go as part of a four-year $2.1 billion efficiency drive.

But jobs in other parts of the public sector, including frontline health worker roles, are expected to grow.

For weeks, the government had warned the budget would involve "challenging" decisions as it aimed to pull back debt amid rapidly rising interest rates.

On Tuesday, Treasurer Tim Pallas unveiled a "COVID Debt Levy", a two-part tax which the government expects will raise $8.6 billion over the next four years and will remain in place until 2033.

Firstly, businesses with a national payroll of more than $10 million will pay additional payroll tax of 0.5 per cent, or 1 per cent if their national payroll exceeds $100 million.

Mr Pallas said he expected the payroll increase would affect about 5 per cent of Victorian businesses.

Secondly, the threshold for Victoria's land tax — which does not apply to the family home — will be lowered from $300,000 to $50,000.

An annual charge of $500 will apply to affected properties between $50,000 and $100,000 as part of the 10-year levy.

A charge of $975 will apply for property landholdings worth between $100,000 and $300,000, while land tax rates for properties above $300,000 will rise by $975 plus 0.1 per cent of the land's value.

Mr Pallas, who estimated about 860,000 landowners would be affected, argued the COVID levy targeted businesses and property owners who had seen healthy recent profits.

"We think big business has the capacity to make a modest additional contribution that over the next 10 years to assist in repaying the COVID debt," Mr Pallas said.

But the opposition accused the government of delivering a painful budget that asked Victorians to pay for the government's financial mismanagement.

Net debt continues to grow

Despite the 10-year COVID debt repayment plan, net debt is still forecast to grow to an eye-watering $171.4 billion in four years' time — nearly a quarter of the state's economy.

That's partly because the budget provided billions of dollars in funding for major election commitments made by the government, including significant commitments across health.

Budget papers estimate Victoria's net debt will rise from $116.7 billion this year to $162.2 billion by 2025-26, a modest reduction on the pre-election budget update of $165.9 billion for that year.

The state's budget is expected to climb back to a $2.9 billion cash surplus this year, but a $1 billion operating surplus will not be reached until 2025-26.

When pressed on why net debt was still projected to remain high despite the imposition of a debt levy, Mr Pallas downplayed the importance of paying off debt taken on to fund state-building projects, compared to debt taken on during the pandemic.

Speaking to journalists in the budget lock-up, Mr Pallas said state-building debt could be likened to a mortgage, while borrowing during the COVID pandemic had become a credit card debt.

"Credit card debt, given the level of interest that accumulates and the choices that you have to make in an emergency has been used, but you need to pay that off because credit card debt keeps accumulating."

The budget did outline a slowed rate of infrastructure spending, which is projected to be between $1-2 billion less each year than outlined in the pre-election budget update.

The government also outlined plans to use the Victorian Future Fund, which was established in last year's budget, to help pay down COVID-19 debt over time.