Victoria is warning it won't sell its stake in the Snowy Hydro Scheme if the federal government tries to dictate what to do with the cash.
The federal government revealed in its budget on Tuesday it would consider buying out Victoria and NSW from the hydroelectricity and irrigation complex in return for infrastructure funds.
Victorian Treasurer Tim Pallas says he has not talked about the sale with his federal counterpart Scott Morrison since a meeting in late March.
"All I can say is the idea that the Commonwealth would acquire it is an interesting one and certainly one that we're prepared to explore," he told reporters on Thursday.
"Any suggestion, however, that the Commonwealth might acquire our asset, pay funds to the state of Victoria and then seek to dictate...how those funds might be applied I think is laughable."
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Mr Pallas said if strings were attached "there will be no sale," but showed mild support for the banking levy.
"At least they are making an effort to try and get back into surplus and reduce their debt profile," he said.
The big banks have already said the cost of the levy will be passed on to customers.
Mr Pallas said the banks should think seriously about whether it's appropriate for them to pass on the charges because the consumer shouldn't have to pay.
