Prime Minister Bill English says the Labour Party are in "a trap" over their proposed plan to tax commercial water use if they're elected into Government following the election.
Speaking to TVNZ1's Breakfast programme, Mr English says Labour is just "speculating" about the tax rate they would put on commercial water use.
"They're speculating about trying to find a low number.
"He says it's the number he would look at – what is the rate?"
Mr English says he doesn't know if Labour's proposed rate is reasonable or would have an economic impact on the country.
"They're in a trap now because if they set a low rate to try and appease the public anger about this then what was the point of having a tax on water if it has no impact?"
Mr English believes the projected $100 million Labour proposes it would generate by taxing farmers for water use would not go to cleaning up New Zealand's water ways but to iwi.
"The other big question they've got to deal with is now they're establishing crown ownership of water so now they've got all the Maori issues they would have to deal with and whatever the rate is how much of it gets paid."
Speaking on TVNZ1's Q+A programme yesterday, Labour's Environment spokesman David Parker estimated the cost to farmers would be around two cents per thousand litres of water used.
"It would be about $100 million across the country for a year," he said.
Mr Parker described criticism that the plan would hike up produce for Kiwi consumers as "scaremongering" and "nonsense".
"I don't think there's anyone in New Zealand that doesn't want to clean up our rivers.
"And if the farmers are coming along and saying, 'Look, we, having caused the problem, we're not willing to make a contribution to that effort.' Really, what would that say about them as a sector?"