National leader Bill English has denied overstating the impact Labour's proposed water levy would have on farmers after figures revealed five in six would be largely unaffected.

Mr English has claimed this week the levy would cost farmers $50,000 a year while his finance spokesman Steven Joyce estimated it could cost twice as much.

Labour's policy says water for commercial use would be levied at one or two cents per 1000 litres.

Figures from RNZ and Auckland University's Public Policy Institute show the average farm would pay around $13,800 a year, based on a two cent charge.

Dairy New Zealand estimates the cost at $45,000 a year for those who irrigate, however RNZ claims figures show just one in six of 12,000 dairy farms are irrigated.

Mr English again hit out at the "dumb tax" on dairy farmers and commercial users including the horticulture industry who had been "arbitrarily selected".

But he denied overstating the levy's impact when meeting with farmers.

"We've talked about the farming communities being affected by a range of these proposed taxes, one of which is water tax which impacts heavily on those who use a lot of water," he said.

"Bear in mind there's also a big horticulture sector that's a considerable commercial user of water.

"We opposed the tax because it doesn't address the issue, which is how to deal with the nutrient impact on the environment and that comes from every dairy farm and not just those who use irrigation."

The water tax has also come under fire from the Māori Party, which wants Labour to clean up water ownership first.

"Until a discussion is held around water rights and interests any potential tax should be off the table - you can't start charging for something you don't own," Maori Party co-leader Te Ururoa Flavell said.

Newshub.