The Allan government will raise $599 million more than expected from its pandemic debt levy on businesses and property investors, but has failed to meet its target for reining in public sector wages, which have jumped 8 per cent to $15.5 billion a year.

The latest Victorian budget update reveals Labor has raised more taxes than forecast but made fewer cuts than promised, leaving net debt on track to reach a record $188 billion by 2027-28 with interest repayments of almost $26 million a day.