Weaker discretionary spending dragged retail sales lower in September as the stimulus from the federal government’s cash payments receded.

The result is likely to encourage the Reserve Bank of Australia (RBA) to leave interest rates unchanged in December, after hiking in each of October and November, economists said.

Retail sales fell 0.2 per cent in September to a seasonally adjusted $19.719 billion, the Australian Bureau of Statistics (ABS) said on Wednesday.

Over the September quarter, retail sales fell by 0.4 per cent in seasonally adjusted volume terms.

The monthly fall confounded market expectations for a rise of 0.5 per cent, while the quarterly decline was as expected.
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Victoria’s budget should serve as a template for other states in tough economic times, an ANZ economist says.

Victoria’s debt will balloon to $16 billion over the next four years under Labor’s toughest budget yet, delivered by Treasurer John Lenders on Tuesday.

The debt will fund a record capital works program - $11.5 billion on major projects - in a bid to save 35,000 jobs in the face of the global financial crisis and a near recession in Victoria.

Most of the money will be pumped into transport projects and school rebuilding.
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