In a significant reshaping of the government's financial approach, Treasurer Tim Pallas has warned he will not be "fixated" on building a war chest of large surpluses merely for the sake of it.

In an interview with The Age, Mr Pallas instead pledged that Labor would manage the budget to provide a reasonable buffer for the state's economy, but would "get the mix right" by expanding services for families and funding infrastructure in the short and medium term.

"We are putting the balance back into the way we allocate between our surplus and our services and making sure that we are also investing in infrastructure that can be delivered sooner rather than later," Mr Pallas said.

Tuesday's budget will predict a $1.2 billion surplus for next financial year, rising slightly to $1.4 billion in 2016-17, $1.4 billion again in 2017-18 and $1.8 billion in 2018-19.

The result suggests the state's finances remain healthy. But it represents a significant downgrade of about $1 billion annually compared to Treasury's previous predictions in December last year, when the budget was expected to be in surplus by $2.2 billion in 2015-16, and by $2.4 billion for the two following years.

It is also a significant change in direction from year's budget, when the Napthine government unveiled surpluses worth $10.8 billion over four years, largely to deliver on a future infrastructure agenda that included an airport rail link due to be completed after 2026.

The Age can reveal the theme of the budget will be "For Families", with a focus on funding election commitments, responsible economic management and improved services in health and education. There will also be an emphasis on infrastructure in the short and medium term, and bolstering skills to cope with transitioning economy as automotive manufacturing winds down.

Treasury will predict relatively modest net debt equivalent to 4.4 per cent of the state economy next financial year to 4.8 per cent in 2016-17, 4.6 per cent the following year, before tapering back to 4.4 per cent at the end of the four year cycle.

The budget represents an important first test for the Andrews government following its political fraught decision to spend at least $339 million to scrap the East West Link contract. It will include $1.5 billion for the long-awaited Metro Rail Tunnel and will detail the government's plan to sell the Port of Melbourne.

A letter from by State Treasury secretary David Martin to Mr Pallas confirms Labor's election commitments will have a "broadly cost neutral" impact on debt by the end of the four year budget period, after factoring various savings measures.

Business groups have complained about a lack of infrastructure work in the pipeline in the short to medium term, with the East West Link now off the agenda. Premier Daniel Andrews last week revealed the government is negotiating with CityLink operator Transurban to build a $5.5 billion raised road and tunnel to act as an alternative to the West Gate Bridge.

Mr Pallas, said the budget would also show tentative signs of an economic recovery. "We are starting to see some embryonic signs that the economy is heading in the right direction but we are a long way from being at a point where we would be popping champagne corks," he said.