Kennett-era treasurer Alan Stockdale says the way out of Victoria’s financial troubles is for Labor to take a page from his former government’s playbook and sell remaining public assets, slash regulation and reduce taxes.

Treasurer Tim Pallas on Tuesday launched a staunch defence of the economic performance of the Allan government, which has come under pressure from repeated warnings that gross state debt is rising to unsustainable levels and Victoria is underperforming other jurisdictions on a range of other measures.