Services boom to help wages: report

A boom in the services sector should lift workers' share of national income by supporting growth in employment and wage rates, a new report says.

Workers will get a bigger slice of the national income pie thanks to growth in services industries, according to a new report.

"Thankfully, the era of a declining labour share may be set to unwind in Australia, due mostly to above-average growth in the labour-intensive service sectors of health, education and professional services," the report by economists at ANZ and the University of Queensland says.

"As a result, the consequences of a falling labour share, such as growing income inequality, may begin to unwind as well."

The report says the services sector's share of the economy's output will rise to 77.3 per cent in 2030, up from 72.4 per cent in 2015.

But the source of the growth will not necessarily be the boom in tourism and the influx of Chinese visitors that is now getting headlines, according to ANZ chief economist and report co-author Richard Yetsenga.

And it's those other industries that have the most strongest demand for labour.

The effect of the increased demand for workers will be magnified by demographic changes restricting the supply of workers - the retirement of the baby-boomer generation, the slow decline of fertility rates and the rise in the average age of the population resulting from medical advances.

"So even in a scenario where you have some pretty decent population growth, you're still eating into available spare capacity in the labour market," Mr Yetsenga said.

"If that's right over a 15 year horizon, you should see reasonable gains in wages in absolute terms."

And although the rise of the services sector has been associated with less job security and increasing use of casual employment, that won't necessarily continue, according to ANZ economist and co-author Toby Roberts.

"The areas we are identifying as the really strong growth ones, being medical services, health in particular, education, professional services, they're not really the ones that have high rates of casualisation," he said.