Mr Hockey arrived in Melbourne on Friday morning to talk infrastructure with state Labor as part of a push to improve the Abbott government's standing in Victoria.

The meeting is significant as it signals the Abbott government is prepared to work with the new Victorian Labor government following its historic election win on Saturday.

At the lunch at Lamaro's in South Melbourne, organised by radio host Neil Mitchell, Mr Pallas was seen deep in conversation with Mr Hockey discussing the merits of the East West Link Project.

According to a source at the lunch, when Mr Hockey arrived he "made a beeline" for Mr Pallas, who produced a short document that the two men examined together in a corner. Guests, including Police chief Ken Lay, detective Ron Iddles and former police association boss Greg Davies, were served steak or salmon. Mr Andrews had to eat and run.

Despite the new state government's promise to dump the East West Link, Mr Abbott this week said he was determined the project would go ahead, with $3 billion of Commonwealth money at stake. He has also said the Commonwealth wouldnot fund commuter rail projects, only roads.

But on Friday he appeared to soften his position, saying he was happy to look at proposals that the Victorian government puts forward "on their merits".

"If they've got other proposals that they want to put to us, by all means put them but we want East West Link built and there's $3 billion of federal money that is put aside for East West Link when the Victorian government finally comes to its senses."

Among other things, Labor has announced plans to upgrade 50 level crossings, build a new road to remove trucks from the Westgate Bridge and address traffic snarls on Hoddle Street.

Victorian federal MPs are nervous about the Abbott government's poor standing in the state. Opinion polls show the Coalition trailing Labor 42 to 58 per cent in two-party preferred terms, suggesting the loss of up to five federal seats.

According to some, withdrawing $3 billion from Victoria would further dampen the Coalition's chances of retaining seats at the 2016 election.

Leaving the pub, Victoria's new Treasurer Tim Pallas said it was the first time he had met Prime Minister Tony Abbott.

"I had the opportunity simply to say g'day," he said.

"It was a pleasant exchange," he said.

Mr Pallas said the lunch was a private gathering and he would not be revealing details of conversations.

The Prime Minister made no comment.

- with Jason Dowling