Reserve Bank of Australia (RBA) deputy governor Philip Lowe is under no illusions about what the mining boom has done for Australia.
"The mining boom has been incredibly enriching for us," he told a CFA Institute Conference in Melbourne last week.
It could be a matter of out of sight, out of mind, but Lowe said development of the continent's natural resources - such as the vast iron ore deposits of the Pilbara, in Western Australia, has had a hugely beneficial impact on the average Aussie's wallet.
"It's hard sometimes when you are living in our great capital cities a long way from the Pilbara just to understand what an impact it's had upon us," Lowe, who is widely tipped to be the next governor of the RBA, said at the conference.
"There is a chain of events that links what is happening on the Pilbara to the cafes in Melbourne," he said. "People often don't see that chain but it is real and it is there."
Lowe said high commodities prices had propped up investment, pushing up the exchange rate which had in turn lowered the price of all imported goods.
In October 2010 the Australian dollar reached parity with the US dollar for the first time since it floated in 1983 and went on to hit its highest post float point of US$1.108 in July 2011.
Much to the relief of Australia's manufacturing export sector, the aussie has retreated to more normal levels of around US95.9c.
Lowe would not be drawn into the politically charged question of whether Australia could have done better out of the boom, perhaps through the advent of a sovereign wealth fund.
But he did say the real benefit of the boom had come in no small part from the strength of the aussie dollar, which meant the price of imported goods has effectively been frozen in time for the past 10 years.
That meant the savings in the price of imported goods had freed up income to be spent on other things, he said.
"It's hard for people to see but it is there. The mining boom is the reason why Australia has over the last decade, by standards of other developed economies, experienced unprecedented income growth."
To cap it off, the boom had come without a blowout in borrowing or wage costs. It had prompted neither a spending, nor a borrowing, binge, he said.
While the Australian economy is currently going through a sub-trend growth patch - economists do not expect it to fall out of bed just because mining investment is starting to tail off. Rather, many expect the economy to enter a new phase where it will start to benefit from the increased export income that the avalanche of mining investment will generate.
Although mining investment is tapering off, there are huge resources being ploughed back into the economy through the liquefied natural gas industry (LNG).
Australia already has three large scale LNG developments and more than A$200 billion ($231 billion) of new LNG projects under construction.
"This investment has boosted our resource exports, and will provide an important source of national income for many years to come," Lowe said.
But he said mining had in part obscured what had been happening in the broader economy.
Outside the resource sector, the Australian economy starts to look similar to the generally sluggish economies of the west. As a share of nominal GDP, non-mining private business investment is currently around 3 percentage points lower than its average over the period from 2005 to 2008 and it is not much above levels seen in the early 1990s recession.
The low level of overall non-mining investment has occurred despite corporate balance sheets being in generally sound shape and firms having significant holdings of liquid assets, Lowe said.
It has occurred despite financial institutions reporting that they are willing and able to lend. And it has occurred despite lending rates being at record lows for both large and small businesses.
The level of mining investment is likely to decline substantially as existing projects are completed.
"The exact profile remains difficult to determine, but it would not be surprising if mining investment, relative to GDP, declined by 3 percentage points or more over coming years."
A decline of this magnitude should be manageable, just as the earlier rise was manageable. It will, however, require a further rebalancing of the economy.
"As part of this rebalancing, exports are set to grow strongly, particularly when the large LNG projects come on line," Lowe said.
A pick-up in non-mining investment is an important part of the story in the return of the Australian economy to trend growth.
"Indeed, our expectation is that this will take place, with growth in non-mining investment predicted to pick up to at least high single-digit rates within the next couple of years."
To that end, the sharp decline in the Australian dollar would help to rebalance the economy after the extraordinary events of the past decade.
Jamie Gray attended the CFA Australia Investment Conference in Melbourne, courtesy of the CFA Institute.
