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Victoria’s state budget is copping heat for being too susceptible to market downturns, a problem shared by other states and territories.

The $1 billion surplus announced in Monday’s state budget was smaller than forecast after government coffers were hit with $5.2 billion in writedowns from a slowing property market.

“Like the other states, the Victorian budget is clearly over-exposed to downturns in property transfer taxes,” Victorian head of the Australian Industry Group, Tim Piper, said in a statement.

“And there is a need to develop an approach to make the state’s revenue more sustainable and less in need of calling on ad hoc revenue sources.”

Ratings agency Moody’s said Victoria’s growing debt was manageable within its triple-A credit rating.

“The forecast increase in debt, resulting from record infrastructure spending and some accounting changes, is considered manageable within its current triple-A rating,” vice president John Manning said, noting the state’s diverse economy is projected to grow at 2.75 per cent per annum over the next four years.

S&P Global Ratings said the property downturn will put pressure on the state’s operating margins and new taxes will only partly offset the gap, adding that wrangling increasing public sector employee costs will be a challenge.

But Treasurer Tim Pallas insists the budget will continue to have surpluses and the property market will improve.