Victoria's 29 per cent stake in the scheme is estimated to be worth $2 billion.

"This is not a situation where the purchaser of a house can tell the vendor how to spend the money and, if they think it is, they can forget it," state Treasurer Tim Pallas told Fairfax Media.

The federal budget revealed that Victoria's share of the infrastructure carve-up had dropped to just eight cents in the dollar, with Premier Daniel Andrews accusing Canberra of ratting on an agreement over major projects.

Federal Treasurer Scott Morrison has flagged the Commonwealth buying out Victoria and NSW's share of Snowy Hydro, with the money to be reinvested in infrastructure.

Mr Morrison told radio that if Victoria sold its share of Snowy Hydro, it would free up money to invest in infrastructure.

"We'll continue to work with Tim Pallas and the Premier on that and we've already had a good start I think to their interest in that, doing that, and that will deliver more infrastructure for Victorians," Mr Morrison said.

The angst over Snowy Hydro comes as Victoria and Canberra continue to bicker over infrastructure funding, with the federal budget revealing the state has been allocated a total of $2.85 billion over five years for infrastructure, including about $500 million for regional rail projects.

That represents just 8 per cent of the total $35.75 billion in infrastructure spending announced in the budget, including $5.3 billion for a federally funded, owned, and operated Badgerys Creek Airport in Western Sydney.

Mr Morrison said if the $3 billion that the Commonwealth was prepared to stump up for the dumped East West Link was counted, the state's infrastructure share rose to 21 per cent.

Speaking at works on a new train station in North Melbourne for the Melbourne Metro project, Mr Andrews said Malcolm Turnbull had been acting as "the Prime Minister for Sydney", accusing him of ignoring Victoria's plea for a $1.45 billion regional rail revival while pandering to the infrastructure demands of NSW.

"The challenge today for Mr Turnbull is to explain why it is OK to rat on a deal with the people of Victoria, to rip off the people of Victoria, but honour all of your commitments down to the very last cent with the government of NSW," Mr Andrews said.

"Mr Turnbull really does need to start governing our nation not just the bits of it that he likes, the bits he lives in, the bits of it that he thinks are important on the electoral pendulum."

After months of dispute, Victoria has all but abandoned any hope of getting the $1.45 billion it believes it is owed under the Commonwealth's asset recycling program, having gained a windfall $9.7 billion under the Port of Melbourne lease deal. Under the program, states that privatise public assets and plough the money back into productive infrastructure were supposed to get bonus payments equivalent to 15 per cent of the sale price.

The Commonwealth had previously booked $877 million in asset recycling money for Victoria, an amount that has now been wound back to $500 million in the budget.

The funding shortfall has also frustrated the state opposition, with senior Victorian Liberals increasingly worried Victoria's treatment could damage the Coalition's chances at next year's state poll.

The state also lashed out at the "very disappointing" health budget for Victorians.

State Health Minister Jill Hennessy said the federal government had allocated no funds for capital investment in Victorian hospitals while the Medicare freeze "does not come off soon enough."

"That is years away for things like specialist procedures," Ms Hennessy said. "That ultimately means people avoid having access to good primary care and they end up in our emergency departments that are already stretched."

with Benjamin Preiss