THE mining industry has underpinned Australia's budget for a decade but Treasurer Joe Hockey says its peak has passed and it's now time for other industries to step up.
Treasury forecasts the Australian economy will grow below trend in 2014/15 chiefly because of a fall in investment in resources projects.
New engineering construction in Australia was expected to fall 13 per cent in 2014/15 and 20.5 per cent the next year.
Coal and iron ore prices are also tipped to continue falling due to growing world supply and moderating Chinese growth.
Iron ore is Australia's number one export and crucial to budget revenues, but its price has plunged 20 per cent in the last four weeks.
The economy is now going through an extraordinary period of transition, in a reversal of the shift during the boom of labour and capital into resources.
"Mining and resources represent about 10 per cent of our economy but two per cent of our employment," Treasurer Joe Hockey told parliament.
"So now we need to fire up the rest of the economy."
Despite the negative outlook for resources, miners will get $100 million in tax offsets to keep exploring for new minerals.
University of Melbourne business and economics professor Neville Norman said he was more optimistic than the government about the resources industry, saying they may be underestimating its strength.
"It will make a big difference to corporate revenue and mining revenue if prices do go up," he told AAP.
"There is nothing more speculative in the budget than speculating on that."
The mining tax, which the government wants to repeal, was expected to raise $100 million in 2013/14, down from $200 million last year, and well down on original forecasts for $10.5 billion in those two years, the government said.
How Australia emerged from the transition would depend chiefly on how quickly non-resources business investment started picking up from its subdued state, Treasury said.
Australia's suite of new liquefied natural gas projects offer hope for new revenue, but there exists uncertainty about gas prices, and investment is falling now mega-projects were mostly built, it said.
The gas industry today is part way through an investment of around $200 billion on seven LNG projects, and will roughly double in export value by 2015-16, overtaking coal, the government said.
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