A South Coast man with alleged neo-Nazi interests has been arrested by counter-terrorism police and charged with planning a terrorist act.
It's alleged the 21-year-old Sanctuary Point man had been planning to purchase military equipment, including guns to make an improvised explosive device.
Police believe the man had been looking to target an electrical substation on the South Coast with the improvised explosive.
Police said other options may have been considered by the man
The 21-year-old was arrested during a raid at the man's home on Saturday.
He was charged with one count of acts done in preparation or planning for a terrorist act, which carries a maximum of life in prison.
The man is expected to face Nowra Local Court later on Monday.
An application will be made to have the matter heard in a Sydney court at a later date.
Further searches were carried out in the town of Parma, near Nowra, on the NSW South Coast.
Police said they began investigating in February when they became aware of several extreme right wing and anti-government posts online allegedly made by the man.
Counter-terrorism police made the arrest after investigators noticed escalating alleged activity carried out by the 21-year-old in the past week.
Police seized electronic devices, tactical equipment and three paintball guns at the Sanctuary Point home.
A further four guns were seized at the home of an associate of the 21-year-old in Parma.
NSW police counter terrorism and special tactics commander, assistant commissioner Mark Walton, said police were looking into any online communication carried out by the man.
"There has been contact with other entities online and I think it is fair to say that the online environment is a petri dish of hate in our community," he said.
"What we know is this person had anti-government sentiment, he was anti-Semitic, he has neo-Nazi interests and has anti-Indigenous interests.
"Unfortunately, he was involved with an ideology that really is one of hate against a lot of different groups."
Australian Federal Police assistant commissioner for counter terrorism, Scott Lee, said investigations were ongoing.
"The decision to execute these warrants and charge a man was made to mitigate any immediate threat, ensure the ongoing safety of the community and prevent further planning or preparations that could have resulted in a terrorist attack in Australia," he said.
Assistant Commissioner Walton said the arrest was likely to have shocked the South Coast community.
"It doesn't matter where someone is, if they're engaged in this extremist activity, we will target then and take appropriate action when the opportunity arises," he said.
It's not known whether further arrests will be made.
Investigations continue.
