Australia's latest Bureau of Statistics report on wages showed workers in private companies have had higher pay increases in the last two quarters, closing the gap to the level of salaries received by those in the government.

In the last two quarters, the pay increases received by those working for the privately owned mining companies and utility firms are higher, the data from the Australian statistical bureau indicated.

Private sector pay increased 1 percent in the December quarter while public sector wages grew 0.9 percent.

Over a period of a year, being a public sector employee earned by a point higher as against that of the private sector. Nevertheless, economists said this would not be for long.

ABC Online in a related report quoting Westpac's economics team says "this is largely due to businesses competing for a shrinking pool of unemployed labour."

"The Westpac-ACCI [business] survey has suggesting that businesses are finding it hard to recruit. In the past, as business were faced with this situation the result was an acceleration in wage inflation," they wrote in a note on the ABS figures.

Workers in New South Wales received a 0.7 percent pay increase during the last two quarters, while South Australia had recorded the biggest quarterly pay gains among the states and territories at 1.1 percent.

Over 2010, Tasmanians had the lowest annual wage increases of 3.3 percent, while Queenslanders did best with an average 4.2 percent pay increase, the ABC News said.