Retail spending grew for an eighth straight month in December to nearly $23 billion.

Canberra consumers appear to have gone on a last hurrah during the Christmas shopping season, ahead of what is likely to be a tough year for the nation’s capital and the home of many public servants.

The ACT reported the strongest spending growth behind Tasmania during December, in what was a record spend-up across the country – approaching $23 billion – in another sign that low interest rates are having an impact.

Nationwide, retail spending posted its eighth straight month of growth, rising 0.5 per cent in December, and led by a 2.5 per cent jump in food retailing.

“Aussie consumers are more confident and choosing to spend more freely,” Commonwealth Securities economist Savanth Sebastian said.

Spending in the ACT grew by 1.3 per cent in the month to a record $418.5 million.

Such buoyancy comes when government spending and the public service is under the microscope of the federal government’s commission of audit.

A similar audit in 1996 resulted in the territory reeling into recession.

The commission is due to release its interim report next week.

Treasurer Joe Hockey again warned that the structural position of the budget was unsustainable and projected growth in spending could not be met from the existing tax base.

“This means that, in the absence of significant fiscal adjustment, public debt will continue to grow and the government’s flexibility to respond to future economic shocks will continue to erode,” he said in a speech to the Lowy Institute in Sydney.

Mr Hockey said his first budget in May would focus on changes to meet a commitment of achieving surpluses that build to at least one per cent of gross domestic product by 2023/24.

Retail turnover grew 0.9 per cent in the final three months of 2013, the strongest growth since the start of last year.

Australian Retailers Association executive director Russell Zimmerman said anecdotal evidence among retailers suggested the shopping spree extended into January.

Another report showed monthly international trade posted a second consecutive surplus, the first surpluses in two years.

The trade balance of goods and services was a $468 million surplus in December after an upwardly revised $83 million surplus in November.

Westpac senior Andrew Hanlan said Australia’s trade position improved materially in the final three months of 2013 with a surplus of $134 million, a turnaround from a $2.9 billion deficit in the September quarter.

“This points to net exports making a healthy contribution to GDP growth,” he said.