Business groups have warned that Victoria’s economy is on track to need a Commonwealth bailout if the Allan Labor government doesn’t urgently start to repair its budget after a damning auditor general’s report said ballooning state debt is unsustainable and poses a structural risk to the economy.

The annual report into the state’s finances tabled in parliament on Friday predicted gross state debt would pass a whopping $228 billion by 2028 with little sign of a government plan to rein it in.