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Parking in the CBD is about to get much more expensive.

An increase in on-street parking fees in the CBD and an above-inflation rate rise are the key announcements in a tough first-year Melbourne City Council budget.

Melbourne's free tourist bus will now cost $5 for an all-day fare, although children under 10 will still travel free.

On-street parking will increase from $4 an hour to $5.50 an hour - and increase of 37.5 per cent - and follow increases in the state budget for off-street parking in the city.

Fees for the council's car parks in the CBD will also increase, up from $5 to between $8 and $12 an hour, with car parking charges to increase outside the CBD.

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Rates will rise 3.75 per cent.

"More than 800,000 people come in to Melbourne every day and 40,000 of them park in the city. We understand that any increase may not be well received, but the fact remains that on-street parking in the City of Melbourne is cheaper than short-term, off-street parking, and considerably less than other comparable municipalities," Lord Mayor Robert Doyle said.

The council also expects to collect $40 million in parking fines in the next financial year.

The council has unveiled a $364 million 2013-14 budget with a $1.11 million surplus and a $96.2 million capital works program.

The rate and parking increases will deliver $15 million and will help offset a "slowdown in the completion of new properties" that has affected rates revenue and a shortfall in parking fines attributed to an "increase in driver compliance".

The budget will contribute $7 million towards the Kathleen Syme Library and Community Centre, $11.1 million for community infrastructure in Docklands, $1.3 million for Queen Victoria Market renewal work and $2.55 million for the council's bicycle program.

The council will also spend $1.5 million to plant 3000 trees as part of its urban forest strategy, which aims to double the number of trees in the city by 2040.

There will also be $1.5 million to help prevent flooding in the city and $700,000 to generate a "solar map" to identify buildings that are suitable for solar panels and encourage their uptake.

The council will continue to promote cycling with $1.5 million to be spent on improving cycling lanes on William Street, $300,000 to install separated bike lanes in Neil Street, Carlton, between Nicholson and Rathdowne streets, and $400,000 on new bicycle hoop parking stands across the municipality.