Originally published by Tansy Harcourt of The Australian.
14.05.2026
Australia’s Snowy Hydro 2.0 remains on the government’s books at $8.3bn despite enormous cost blowouts of the project and uncertainty about when the delayed development will be delivered online.
Budget papers showed the book valuation was an unspecified asset in “equity investments in other public sector entities”, with the total valuation for these off-budget assets rising by $7.5bn from last year to $59.3bn.
Experts said that was surprising given the assets are Snowy 2.0, the customer-challenged Western Sydney Airport, the partially scrapped Inland Rail, and NBN Co.
All of these assets should have suffered impairment charges if they were assets in a public company. University of Wollongong professor Brendan Lyon said governments should not be allowed to hide bad policy behind dodgy accounting.
“The government has special accounting standards that allow public money to be spent ‘off-budget’, with assets then reported at an estimated ‘fair value’, not their cost,” said Mr Lyon.
“The accounting standards for government require attention because they’ve removed political accountability for risky public expenditures and obscured the costs of policy and project failure.”
Off-budget bookkeeping rose in popularity under former Prime Minister Malcolm Turnbull, who first championed Snowy Hydro and who used it to great effect for NBN.
Catastrophic examples of government “off-budget schemes” include the enormous losses by the State Bank of Victoria and the State Bank of South Australia in the 1980s.
The total cost of building Snowy 2.0, including transmission lines and financing costs, has blown out by $40bn, according to former energy executive Ted Woodley and economist Bruce Mountain, and the Snowy Hydro pumping infrastructure itself may cost $20bn, according to their report.
That’s on top of the $6bn the former Coalition government paid to buy the asset from the NSW and Victorian state governments. It’s unlikely that the project will be finished in the current decade, and some engineering experts have questioned whether the angled tunnelling can be done at all.
The technical challenges include an inclined pressure shaft lined with specially designed concrete segments rather than steel that will be the “the first in the world”, if completed.
“Snowy 2.0 seems unlikely to recover its spiralling costs, but like NBN Co, it is reported as a taxpayer asset worth billions,” said Mr Lyon.
Snowy Hydro 2.0 is not a net provider of electricity. Instead, it will do the work of a mega-battery, using surplus solar and wind during hot or windy days to pump water to an elevated reservoir that can be released to create electricity when needed.
Snowy 2.0 was announced under Mr Turnbull, and the Morrison government remained supporters of the project throughout their time in charge. Now, the Labor government is reaping the rewards of having unionised workforces employed at top dollar on a renegotiated cost-plus deal so that Italian builder Webuild would not lose money irrespective of the outcome.
Details about Snowy 2.0 were scant in the budget, released on Tuesday. As this paper revealed, it did show the Albanese government has accelerated a loan payment and added a $975m equity investment as the flagship renewable energy development tackles a cost blowout and major delays.
Snowy has been loaned $4.35bn by the government over the next two financial years, split between $1.45bn in 2025-26 and that amount then doubled to $2.9bn in 2026-27, the budget papers say.
The fact that it needed more funding more quickly than previously budgeted for would come as no surprise to Snowy watchers. What is strange though is that, unlike other projects, it has no other forecast projected loans beyond 2027.
It’s expected the project will require significant further cash injections. The national audit office is due to report an updated cost estimate in May, but that figure won’t include all the essential power transmission lines required to take power to and from the remote national park location.