In my assessment of the June-quarter 2012 National Accounts data the title indicated my assessment of where the economy was heading – Australian real GDP growth weakens and there is worse to come. Well, the worse to come came today with the release by the Australian Bureau of Statistics of the – Australian National Accounts – for the September 2012 quarter. The Australian economy continued to decline in the September-quarter and the trend is firmly down. The latest data available suggests that the slowdown in September (now officially revealed) has accelerated into the December-quarter, which is consistent with the trend shown in today’s data release. Today’s data release is now revealing for the first time the damaging impact of the fiscal austerity that the Government is pursuing. The government contribution to real GDP growth in the September-quarter was -0.5 percentage points, which totally nullified the positive contribution from private investment. A reasonable assessment is that the national growth rate is running around 2 to 2.5 per cent and falling, which is already well below trend. Employment and real net national disposable income are falling and the outlook is decidedly negative. As the former governor of the RBA said yesterday – fiscal policy is “just plain dumb” at present.