Mr Daley was making the argument, also suggested by Labor leader Luke Foley, that selling the profitable poles and wires business to build rail lines that lose money is bad economics.

"It does not make sense to sell the state's most profitable assets to invest in unprofitable assets," Mr Foley said on Sunday.

On Tuesday Mr Daley put the argument more fully.

"Mike Baird wants to spend half the proceeds – $10 billion – on one second harbour rail crossing ...  it will be subsidised to the tune of 80 per cent like the entire Sydney rail network is for the rest of its life," Mr Daley said.

"He's converting this giant government-owned massively profitable enterprise into a tunnel under the harbour that will lose money. Last year Sydney rail, $4 billion was the cost to run it, it recovered $700 million at the farebox," he said.

"You're turning a very profitable electricity network into a tunnel under the harbour, it will cost money to build it, it will cost money to maintain the tunnel and the trains that run through it will run at a loss."

The argument mirrored the perspective put forward by the Labor-aligned thinktank the McKell Institute last year. The institute argued that higher public transport fares and levies on property near transport developments were preferable funding mechanisms to privatisation.

The Transport Minister, Gladys Berejiklian, immediately questioned whether Labor was committed to another harbour rail crossing, which is the centrepiece of the Coalition's public transport policy.

Labor says it would start construction on that harbour crossing in 2021, four years after the Coalition.

Ms Berejiklian also called on Labor to rule out large public transport fare increases.

"Mr Daley said the rail network received 'one of the highest subsidies in the world' – which is Labor code for 'elect Labor and we'll increase fares'," Ms Berejiklian said.