A man accused of carrying out a terrorist act on New South Wales' south coast has told police his initial target was Wollongong.

Simon Fleming is standing trial in the NSW Supreme Court after pleading not guilty to committing a terrorist act in the suburb of Windang on November 28, 2021.

During his opening statement, crown prosecutor James Renwick told jurors Mr Fleming left his Windang home at about 9am.

The court heard the 41-year-old was clad in black clothing and carried two rifles and a silver brief case that resembled an improvised explosive device.

Mr Renwick said the accused fired multiple rounds into the air and at a car on Windang Road before taking two men hostage in a nearby dive shop.

He then allegedly made demands from the police before surrendering himself to officers at 10:30am.

Body-worn camera footage of the arrest shown to the jury revealed police officers were concerned that Mr Fleming had a detonator on him.

In the video, Mr Fleming told Lake Illawarra Sergeant Nicholas Park the silver briefcase was a "fake bomb".

He then told the officer, "I was going to f***ing go into Wollongong to do it, but I couldn't".

When asked, "Why Wollongong?", the accused responded that it was a "bigger city" and he "wanted the government of this country to stop f***ing with our people".

"We are under attack," Mr Fleming told the officer.

Mr Renwick tendered to court a number of documents written by Mr Fleming before November 28.

It included Mr Fleming's alleged manifesto entitled, the fuse, a one-page document entitled, organisation (which detailed his plan for the attack), and a farewell letter to his family.

Mr Renwick said the documents revealed Mr Fleming's state of mind prior to the terrorist act.

"You will have some insight into his political and ideological views on the day in question," he said.

"They include, we say, the demise of Anglo-Saxon men in society and the demise of Christian values."

Mr Renwick said Mr Fleming was concerned with what he described as white genocide and disliked political correctness, feminism and cultural Marxism.

Mr Renwick told the jury they would not be judging Mr Fleming's political views, "views which may be considered anti-Islamic, transphobic or homophobic".

"But the accused is not being charged because of his political or ideological views," he said.

"What makes it criminal, is his acts or threats which involved violence and threatened violence, done with the intent of advancing his own political or ideological causes."

The court heard Mr Fleming collected Nazi and World War II memorabilia and held a keen interest in American politics.

Jurors were shown photos of the inside of Mr Fleming's Windang residence taken during a search of the property where he lived with his parents and aunt.

Photos from inside Mr Fleming's room showed a large Nazi flag hanging on the wall.

Two further Nazi flags and multiple Nazi outfits were discovered in a search of Mr Fleming's room as well as a number of World War II knives with Nazi insignia.

The trial continues before Justice Helen Wilson.

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