AAP
One in 10 Victorian public servants will lose their jobs and motorists will be slugged an extra $35 for their car registration.
Some 3600 public service jobs will be cut with unions and the opposition condemning the move and the timing of the announcement, 10 days before Christmas.
Treasurer Kim Wells said the reductions would come from administration staff and will not affect front-line employees such as police, nurses and teachers.
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He said they would not affect the government's ability to deliver on crucial services such as health and education.
"We believe 3600 is the right amount, it's that back office, administration area that will not affect front-line delivery."
Mr Wells also announced car registration will go up by $35 while stamp duty on new cars will jump from 2.5 to three per cent.
Opposition employment spokesman Tim Pallas said the job cuts were an unwelcome Christmas gift for Victorians, labelling the new vehicle charges as an unashamed cash-grab.
"Just before Christmas we hear in the cruellest possible terms that the government intends taking away the jobs of 3600 public servants," Mr Pallas told reporters.
"They have bludgeoned the Victorian economy effectively to a point where it is not producing and delivering the welfare and well-being for Victorians."
He labelled Mr Wells as worse than the Grinch.
"I think he's a little bit more than that. The Grinch ultimately saw the error of his ways. I don't think Kim Wells will see the error of his ways."
CPSU secretary Karen Batt said the job losses broke a coalition election promise and were premature given a commission of inquiry was underway into how to make the state more efficient.
"The timing of the announcement is appalling, 10 days before Christmas," she told AAP.
"I think the government should be condemned for it."
She also said that despite being in enterprise bargaining negotiations with the government, the job cuts came without warning.
"We had absolutely no briefing whatsoever," she said.
"It leaves me bewildered that you can be sitting there in a room (with government representatives)... and no mention is made of this and we get told of this when the press conference is called."
Announcing the changes at the Victorian budget update, Mr Wells said the measures were necessary to strengthen finances and weather global uncertainty.
"We can no longer aim to run small marginal surpluses, we need to build the operating surplus to higher levels in order to fund infrastructure without increasing net debt."
He said the cost cutting would see the state budget surplus rise to $1.3 billion in 2014/15.
Mr Wells said the job reductions would shrink the public sector to 2007/08 levels after several years of unsustainable growth.
He said the public sector had grown at an average of 5.3 per cent per year since 2006, compared to a two per cent annual population growth.
"This growth has to be paid for and has been imposing a rising burden on the private sector," he told reporters.
"The inevitable effect of spending growing faster than revenue is that surplus gets thinner and eventually disappears."
Mr Wells said the redundancies would be voluntary and occur over the next two years.
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