"The project, if it is built, will create tens of thousands of jobs."

Key points: A sudden rebound in the prices for our major exports has helped bring the federal budget back to surplus quicker than expected

A sudden rebound in the prices for our major exports has helped bring the federal budget back to surplus quicker than expected Commodity prices fluctuate dramatically at times, making it difficult for federal governments to plan

Commodity prices fluctuate dramatically at times, making it difficult for federal governments to plan For all the cash currently flowing into Canberra from the resources sector, only a trickle makes its way through to the economy

"It will generate, over the course of its life, an enormous amount in taxes and in royalties, revenues for state and federal governments.

"So plainly there is a huge economic benefit from a big project of this kind, assuming it's built and it proceeds."

So said former Prime Minister Malcolm Turnbull two years ago when pushing for the construction of the giant Adani coal mine in central Queensland.

When Treasurer Josh Frydenberg hands down his maiden budget next week, it will be an election document bloated by the proceeds of mining revenues, delivering some handy ammunition for a pitch at re-election.

Another sudden rebound in the prices for our major exports, iron ore and coal, has helped bring the federal budget back to surplus far quicker than anyone expected.

But that sudden influx of cash and the spin that goes with it, sits strangely at odds with all the recent talk of a "per capita recession", the lowest wages growth on record, collapsing housing prices, pressure on the Reserve Bank to cut interest rates and a general sense of funk over the direction of our economy.

It's because we again are feeling the effects of a two-speed economy; except this time there is a stark difference between our internal economy and our external earnings.

Mining and the jobs myth

Resource exports are vitally important to our financial well-being. Mining accounts for about eight per cent of our Gross Domestic Product and around 60 per cent of our export income.

But few Australians benefit directly from a booming resources industry.

Mining these days is highly sophisticated and capital, rather than labour intensive.

Mining these days is highly sophisticated and capital rather than labour intensive. ( Reuters: David Gray )

Much of the grunt is done by machines, run by computers that are operated, in many cases, thousands of kilometres away from the action.

According to the job figures from the Australian Bureau of Statistics released last week, around 257,000 Australians work in the mines.

It sounds like a lot of people. But that's out of a total of 12.6 million — a little over two per cent of the workforce — giving you an idea of just how mechanised the industry is.

Greater automation continues to whittle back the numbers of those employed. In fact, mining jobs peaked back in 2012 when 278,000 were employed in the sector.

To put that into perspective, as a nation we have created around 200,000 new jobs — the entire mining workforce — each year for the past five years.

As we saw from the boom, both before and after the financial crisis, most new jobs created from the huge amount of investment poured into the industry was in construction.

Once the new mines were up and running, the builders were sent home, many of them back to the eastern states to feed the next big boom in housing.

Just to compare, we have more than 1.16 million construction workers.

After the boom

Most of us benefit from resources booms via a stronger currency. They allows us to buy imported goods and services more cheaply.

But there's a trade-off there too. The stronger dollar, if it persists long enough, can put local manufacturers and service providers out of business because they simply can no longer compete.

Many never return, even after the dollar subsides. Then there's the inevitable hangover.

With the Inpex project now completed, those who flew in to build it are now leaving en-masse. ( Supplied )

Just as a sharp lift in investment spending in a resource project can boost income and the economy, the sudden withdrawal can have a devastating effect on a regional economy, particularly if governments have assumed the good times would last forever.

Take the Northern Territory, for example. Its fortunes were buoyed by the construction of several major gas projects in recent years.

But with the Inpex project now completed, those who flew in to build it are now leaving en-masse, leaving its finances in crisis and creating headaches for those who invested during the good times.

Western Australia has experienced similar withdrawal symptoms. The proceeds of the decade long boom weren't banked and the aftermath from the prolonged party has left the state's finances in serious strife with huge debts.

Perth property has been on the slide for four years with losses now approaching 20 per cent.

Then there's the impact on federal finances. Commodity prices fluctuate dramatically at times, making it difficult for federal governments to plan, particularly on budgetary issues.

If there's one thing Prime Minister Scott Morrison did correctly during his time as Treasurer, it was to put conservative values on the price of iron ore and coal.

In last year's budget, he banked on iron averaging this year at $US55 a tonne. Lately, it's been pushing $US90.

For every $US10 a tonne lift, an extra $5.5 billion flows into Treasury which helps explain the pre-election bonanza.

Miners raking it in

Most of us have heard about the "end of the mining boom". What really came to an end was a mining investment and construction boom.

Over the past few years, our big mining companies have been raking in the profits as those new mines come on stream and as China has maintained demand for raw materials.

During the most recent profit reporting season, the big resource groups showered investors with dividends.

During the most recent profit reporting season, the big resource groups showered investors with dividends. ( Source: Australian Industry Group )

While that should be good news, a large part of the proceeds flow directly offshore.

Our big miners are all multi-national companies. Both Rio Tinto and BHP have dual listing structures, on the Australian Stock Exchange and the London Stock Exchange.

Even the smaller and mid-sized miners attract investors from around the world.

And then there are mining companies completely owned by foreigners, including the Chinese Government.

By some estimates, the Australian mining industry is more than 80 per cent owned by foreign investors.

For all the cash currently flowing into Canberra from a booming resources sector, only a trickle makes its way through to the economy, at least directly.

And while jobs certainly are created during the investment and construction phase, that tends to be a fleeting event.

Over the past few years, our big mining companies have been raking in the profits ( Reuters: David Gray )

Our resources won't last forever. They're non-renewable. The tragedy is that the proceeds, rather than being saved for a day when we no longer have commercial quantities, largely flow offshore.

What we're left with is a short-term sugar hit for jobs and a means to plug a budget hole.