Snowy Hydro sale is OK if Sydney is cut out of proceeds, says Labor

The Snowy Hydro pipeline leading to the Murray 1 power station at Khancoban.
The Snowy Hydro pipeline leading to the Murray 1 power station at Khancoban.

The NSW opposition says it will support the latest mooted major sale of a state government asset if it wins power, but on one condition: Sydney does not get one cent of the proceeds.

The federal government's budget announced future plans to buy some or all of NSW's near 60 per cent stake in the Snowy Hydro power company as part of a major expansion of the historic scheme to include new forms of electricity generation.

NSW and Victoria jointly own about 87 per cent of the shares in Snowy Hydro Limited, a stake that could be worth $5.5 billion.

The state's opposition leader, Luke Foley, said that if he were elected Premier in 2019 he would support the sale, but only to direct the proceeds to regional areas, including Albury. 

"Regional communities (are) crying out for infrastructure," Mr Foley said.

"All of the four to five billions dollars (the NSW government) receives ought to be allocated to building schools, hospitals, roads and water security infrastructure across regional NSW."

Mr Foley further added that Labor would only back a sell-off if the scheme remained permanently in public hands and protection of the environment and water rights were secured post-sale.

Premier Gladys Berejiklian declined to match Mr Foley's plan and said the government was already spending record amounts on infrastructure in regional NSW. 

"Any decision the NSW Government makes on the Snowy Hydro transaction will be in the best interests of the people of NSW and the local community," she said.

Mr Foley campaigned hard against the electricity privatisations during the 2015 election campaign but soon after declared the matter "settled".