SYDNEY, June 5 -- Economists and fund managers have warned Australia's chase for yield through dividend payouts are leaving company cash stockpiles bare, hampering future economic growth opportunities, the Australian Broadcasting Corporation (ABC) reported Friday.

National Australia Bank (NAB) chief economist, Alan Oster, told the ABC companies are using the spare cash to dress up balance sheets, pay extra dividends and do capital restructures.

"Until business feels more confident about where they are going, they are going to be more inclined to essentially give back yield so that their stock is seen more as something you should buy for yield," Oster said.

PM Capital Chief Investment Officer Paul Moore said a mentality has developed showcasing the need to give Australian investors what they want.

"And my suspicions are that they have gone too far and haven't left themselves enough room in terms of if there are any investment opportunities, that they have enough room in terms of retained earnings," Moore said.

Data from Bloomberg and Lincoln Indicators show S&P/ASX 200 companies have increased dividend payouts by 64 percent in five years.

Increased dividend payout is speculated to be behind the latest Australian Bureau of Statistics data showing firms planned to spend 25 percent less on capital expenditure in the next Australian financial year.

Moore says however yield play on the Australian market is starting to unwind as the past 12 to 18 months have seen better investment opportunities in overseas stocks with a better earnings cycle.