In the June-quarter, it was only the contribution of public spending that allowed the Australian economy to avoid negative growth. That contribution disappeared in the September-quarter and given the fiscal settings and the negative investment contributions it was obvious that Australia would slide closer to recession – recording negative growth for the first time since the September-quarter 2011. The fact is that the non-mining part of the economy is already in recession and has been for some time. Today, the Australian Bureau of Statistics released the – September-quarter 2016 National Accounts data – which showed that real GDP had indeed slumped to record a negative 0.5 per cent outcome. Annual growth (last four quarters) has fallen to 1.8 per cent, but the September-quarter outcome is closer to where we are now rather than what happened towards the end of last year and earlier this year. The Australian economy has been marching inexorably towards recession for the best part of this year and government refuses to budge from its attempts to impose fiscal austerity. Madness is a euphemism for their policy conduct. Incompetent also comes to mind. the September-quarter result has been driven by a negative contribution from private capital formation, net exports and now public spending. The only on-going positive contribution to growth came from household spending. My experimental research (which I will blog about when I am more certain of the methodology) show that when we take out the mining sector, Australia has been in recession or near it for some quarters and only the government contribution has made the difference between the two states. 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 with the Federal government intent on imposing austerity, then the nation is probably already recession overall (given the National Accounts data is already three months old). That should be a huge wake up call for the Federal government which is currently trying to bully the Senate into accepting massive cuts in public expenditure.