Health, wage costs challenge Vic budget

Rising health and wage costs will challenge Victoria's plan to remain in budget surplus, a financial agency says.

Moody's Investors Service says Victoria's slower revenue growth will also constrict the state budget, and the government can't rely on one-time revenues to prop up the balance sheet.

"The state's plan to remain in a surplus for most years over the medium term will be challenged by the need to continue to achieve low rates of spending growth," the Moody's report, released on Tuesday, said.