Victoria will fund the $11 billion Melbourne Metro Rail project without federal help after taking a swipe at the "merchant banker" Malcolm Turnbull.

The 2016/17 state budget includes $2.9 billion for the twin rail tunnels under the CBD, with the rest out beyond the forward estimates.

“We just can’t wait. We are deadly serious about delivering this project, and we will deliver it, with or without the federal government,” Treasurer Tim Pallas told reporters.

Victoria originally wanted $4.5 billion from the federal government for the Melbourne Metro, but Mr Pallas said Prime Minister Malcolm Turnbull was only interested in loans.

“(You should) stop pretending you are a merchant banker and start pretending to be a prime minister,” Mr Pallas said.

The state government will fund the entire project and hopes to recoup some costs from the private sector, although Mr Pallas said he’d welcome future funding from Canberra.

“I just want this nonsense of everybody picking their favourite project and pushing and shoving so that nothing ever gets done, to come to an end,” he said.

The budget also includes $1.3 billion for investment in regional rail and $1.1 billion to rebuild schools.

Funding has already been announced for 400 new police, along with $572 million to respond to the recommendations of the family violence royal commission.

There isn’t much relief when it comes to the cost of living despite a $2.9 billion surplus in 2016/17, but the business community received a payroll tax threshold increase.

Mr Pallas admitted the government had more work to do in 2016, with housing affordability due to be addressed, along with a response to a review of vocational education and a review of Gonski funding.

He flagged maintaining net debt at six per cent of gross state product, unlocking up to $16 billion for infrastructure spending over 10 years while keeping financial costs low.

Revenue growth is pegged at 3.4 per cent, while expenses are growing at 3.3 per cent, and Mr Pallas argued he was being prudent by not spending more.

“Our revenue growth has sat around 5.9 per cent … we’ve had to trim our expectations,” he said.

Shadow treasurer Michael O’Brien said the budget surplus was built on high taxes.

“I’d be embarrassed if I saw taxes increase by 20 per cent in just two years on my watch,” Mr O’Brien told reporters.

He also said public sector wages had increased 15 per cent in two years, but police, nurse and teacher numbers had not increased that much.

The Victorian Chamber of Commerce and Industry said it was a “pro-business” budget that backed businesses to succeed.