VICTORIA was $685 million in the red as of the end of September this year.

In the three months to September, the state recorded a $685.1 million deficit, according to the quarterly financial report.

Treasury is forecasting the state will deliver a $154.9 million surplus for the entire 2012/13 year.

The September quarter deficit was driven by several factors including most land tax revenue not being recognised until the March quarter.

Dividends from public authorities are also not recognised as revenue until determined, which usually happens in October and April each year, and some Commonwealth capital grants are not received until later in the year.

The full effect of job cuts in the public service will begin to flow in the second half of 2012/13.

"Nationally, economic growth levels were around trend," Treasury said in its report tabled to parliament today.

"Resource investment continued to be a key driver of Australian growth although there are signs of the resources boom peaking, while household consumption remained robust.

"There were tentative signs that the softening of the property market had reached its low point."