Given that New Zealand has abundant (albeit variable) rainfall, the current allocation and use system has grown out of a situation where there was very little scarcity. This mindset is still common today; many New Zealanders believe that water should be 'free' and there is little appreciation of the number and intricacies of allocation issues.
In international and historical terms, growth and intensification has happened very quickly in New Zealand. The current allocation and use system has failed to keep up with this growth and change is required - in particular situations there will not be enough water to meet all desired uses/demands. A flexible allocation and use system may encourage higher environmental, social, cultural and economic values to be catered for, hence assisting to achieve the difficult balance of maximising economic wealth whilst ensuring a quality environment for all New Zealanders to enjoy.
Māori have particular interests in freshwater in New Zealand, arising out of their traditional interests and the guarantees contained in the Treaty of Waitangi. The strength of these interests is not always reflected in water management and allocation decisions.
New Zealand has some advantages in terms of analysing water allocation and use problems and determining solutions. It is much better to address these issues before water resources are fully allocated, at which point reforms are more likely to require changes to existing use rights. It is also desirable that changes are made in a sufficiently timely way to avoid adverse environmental impacts, rather than facing a situation requiring urgent clawback of water as is currently the case in Australia. The possibility of clawbacks creates uncertainties for investment, and security of water supply is important to the long-term viability of many users of water.