We have a state budget in surplus, so let's just have it paid for at a state level.

I can see the reasoning behind that, but I can also forsee the extreme rebellion of people in Gippsland, Yea, Mildura etc to the funding of the inner city.

If public transport were free, more people would use it to go places and spend money on other goods and services.

An estimated 30% increase in existing services. Personally I think that's pretty low.