Sale of Sydney Water considered by NSW government

With privatisation firming as a key NSW election issue, leaked documents show the government sought advice on the sale of Sydney Water as it looked to fund infrastructure projects.

Feedback was called for on the viability of Sydney Water as the coalition considered upgrading water infrastructure in the city's west, documents seen by AAP reveal.

"Shareholders have shown a preference for maintaining or increasing returns to government and asset recycling," according to a board-level briefing note generated by the utility.

Asset recycling is the sale of public assets to return cash to the state.

The report, prepared in February 2021 when Premier Dominic Perrottet was treasurer, outlines five options for Sydney Water, including a full sale or partial sale, managing the assets as they are or introducing developer charges.

Less than two weeks from the March 25 election, privatisation has sharpened as a key voter issue, despite the major parties vowing not to sell public assets in the next term of government.

Last month, the premier dismissed suggestions he wanted to offload the state's water body, saying there were "no plans" to do so.

A spokeswoman for Water Minister Kevin Anderson reiterated the comments on Tuesday.

"Labor should stop lying to the people of NSW," she said.

However, Labor Leader Chris Minns has attacked the premier over his stance, saying his opponent has been an advocate for asset recycling and privatisation his entire professional career.

The controversy comes with the pair set to face off in a midday debate on Wednesday hosted by Nine News and the Sydney Morning Herald, and moderated by Liz Daniels and Peter Overton.

They will be joined by political journalists Chris O'Keefe and Alexandra Smith.

Meanwhile, thousands of NSW children born across the border will be eligible for the Liberal Party's signature future fund, after the premier's office clarified comments he made on Tuesday.

The Kids Future Fund, a centrepiece election policy, would set up an account for every child 10 years and under to receive $400 a year from the government until they turn 18.

Mr Perrottet told reporters on Tuesday only children born in NSW would be eligible, despite contrary advice offered by Nationals MP Nichole Overall.

"As long as you reside in NSW, you are eligible for the Kids Future Fund," she said on Monday.

The premier's office later clarified children would be able to access the scheme by their parents using their principal place of residence.

Costing $850 million over the next four years and $525 million a year at its peak, the policy has been criticised for favouring wealthy families able to contribute up to $1000 a year to maximise the nest egg.

However the universal seeding of accounts with $400 and $200 annual contributions for low-income families, could counteract that and bring down inequality, economic adviser David Sligar said.