Last we we learned that investment in Australia has plunged in the June-quarter. Yesterday, we learned that the external deficit has risen and the contraction in net domestic spending would reduce real GDP growth by 0.2 percentage points. Today, the Australian Bureau of Statistics released the – June-quarter 2016 National Accounts data – which showed that real GDP has slowed significantly in the most recent quarter, growing by only 0.5 per cent (down from 1 per cent in the three months to March 2016). The March-quarter result is now looking like an aberration. Without that public spending contribution to growth, which was dominant in the June-quarter, Australia have recorded negative growth in that quarter. The contribution from non-government spending netted out to minus 0.5 percentage points with negative contributions from the external sector and private capital formation and a declining contribution from private households. The on-going negative growth in private investment means that potential output in Australia and future growth rates will be lower than otherwise. Not a positive sign. The data continues to confirm that Australia faces a very uncertain outlook and if public spending is cut in the current quarter then the nation is heading for recession. That should be a huge wake up call for the Federal government which is currently trying to bully the Senate into accepting a $A6 billion cut in federal public expenditure.