Victoria remains on track to post a surplus despite being $685 million in the red at the end of September, the state government says.
In the three months to September, the state recorded a massive $685.1 million deficit, according to the quarterly financial report.
But Treasury is still forecasting the state will deliver a $154.9 million surplus for the entire 2012/13 year.
Treasurer Kim Wells said $2.2 billion in budget savings measures, including the axing of 4200 public servants over two years, were on track.
"We believe we have a very strong budget," he told reporters on Thursday.
"We are on track to deliver the $155 million surplus (for 2012/13)."
If the government does have the budget $155 million in the black by the end of June next year, it will have met its election promise to deliver minimum $100 million surpluses.
The September quarter deficit was driven by several factors including most land tax revenue not being recognised until the March quarter.
Dividends from public authorities are also not recognised as revenue until determined, which usually happens in October and April each year, and some Commonwealth capital grants are not received until later in the year.
The full effect of job cuts in the public service will begin to flow in the second half of 2012/13.
Mr Wells said that 10,500 of the 18,700 full-time jobs created in Australia last month were in Victoria.
The deficit comes after Auditor General Des Pearson on Wednesday said the government's strategy of relying on hundreds of millions of dollars in dividends from government agencies to prop up its surplus was "risky".
Mr Wells continued to refuse to directly answer questions about the auditor general's criticism.
"(Ratings agency) Standard and Poor's have come out and have stamped our budget and our finances as triple-A stable," the treasurer told reporters.
"Des Pearson did not say that we were wrong.
"We have said that Des Pearson has done an outstanding job as the auditor general and we're very pleased ... with the report that he brought down."
Treasury said in its report national economic growth levels were around trend with resource investment a key driver of Australian growth, although there are signs of the boom peaking.
The government is due to deliver its mid-year budget update by December 15.