Water management lacks consistency, and more flexibility is needed in how it is allocated, an economic think tank says.
A report by the New Zealand Institute of Economic Research recommends allowing water rights to be traded rather than being allocated on a first-in, first-served approach, and centralising key management decisions.
One of the report's authors, Bill Kaye-Blake, said more needed to be known about community attitudes towards economic, cultural and environmental uses of water.
"First of all, we have to understand that lots of people have an interest in this and there are political pressures on it, there are economic pressures, social pressures and, in addition, we need to understand the institutions that manage water.
"Getting all of those right can lead to what we call a durable solution, so a solution that people are comfortable with, because they're getting something out of it."
The report presented an opportunity to rethink how we managed water, Mr Kaye-Blake said .
"People know that it's important. With things like the recent drought, we know that we're vulnerable but it's also become a topic that people want to talk about. They want to talk about what they get out of water - the recreational uses, the social uses, as well as the economic uses," he said.
"We're rethinking how we manage water and we think this is a time when we might be able to get it right."
That was because there was interest at both national and regional level, and resources were being put into water studies, Mr Kaye-Blake said. As well, the Government was focussed on getting public investment in the policy.
