A quarterly budget update, tabled in state parliament on Friday, shows Victoria pulled in $164 million from its COVID-19 debt levy from the start of July to the end of September.
It helped lift payroll tax revenue in the state by $366 million compared to the same time last year, but the budget boost could have been higher if not for a drop in stamp duty income.
"This increase is partially offset by a $506 million decrease in land transfer duty, primarily driven by the fall in settlement volumes and transaction prices that coincided with an increase in interest rates," the report read.
The Reserve Bank of Australia on Tuesday raised interest rates by a quarter of a percentage point to a 12-year-high of 4.35 per cent.
It was the first hike in five months but the 13th over the past 18 months, jacking up repayments for borrowers.
Victorian businesses with a national payroll above $10 million are also facing an extra financial burden in the form of an additional tax of 0.5 per cent on their payroll from July 1 as part of the COVID-19 debt levy unveiled in the May state budget.
Those with a national payroll above $100 million are paying an extra one per cent.
Under the second part of the levy 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.
The levies are expected to raise $31.5 billion over the next decade, with Victoria's net debt tipped to top $171.4 billion by mid-2027.
Net debt rose $5.5 billion to $120.6 billion over the most recent quarter but the projected figure for the end of the 2023/24 financial year is down from $135.4 billion to $133.8 billion.
Total quarterly expenses were $1.8 billion higher than the same time last year, with the report recognising the government had agreed to a $380 million settlement to cancel the 2026 Commonwealth Games.
The state recorded a $2.5 billion operating deficit over the quarter but the report cautioned against using the result to project the full-year outcome.
Funding the operating deficit and the Victorian government's extensive infrastructure program were primarily responsible for total liabilities growing by $10.4 billion to $214.8 billion.
The budget update suggested Victoria's economy is performing well but acknowledged high inflation and rising interest rates were heaping cost-of-living pressures on households.
Shadow Treasurer Brad Rowswell hit out at what he described as a "spending spree" by the government.
"Under Labor, Victoria is broke and life is getting harder as Victorians pay the price for its incompetence," he said.
A state government spokesperson said Victoria is the only state or territory with a COVID debt repayment plan.
"Our economy is strong, jobs are at near-record highs and our fiscal plan is on track."
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