The Health Minister is expecting councils to "step up" and fix their water supplies if they're not up to scratch.
A report released Wednesday found more than 700,000 Kiwis' drinking water is not "demonstrably safe", following the Havelock North gastro crisis of 2016.
"That doesn't mean it's unsafe - it just means we can't be certain that it's safe," new Health Minister David Clark told The AM Show on Thursday morning.
"[The report] draws attention to the fact our water standards were world-leading in 2007, but very little has been done since. No compliance notices have been issued, and the legislation hasn't been updated."
The first part of the report was released in May, and found the Hawke's Bay Regional Council and the Hastings District Council "failed to adhere to the high standards of care necessary to protect public health and illness".
Three deaths were linked to the contamination of Havelock North's water supply, traced to two shallow bores on the outskirts of the town. Wednesday's recommendations include "universal" treatment, saying there is a misunderstanding that bore water drawn from a 'secure' aquifer is always safe to drink.
"I can't guarantee that," said Dr Clark. "I grew up on tank water myself in the 1970s and '80s, it was untreated - and actually standards have moved on. The rest of the world's moved on - we do need to do better."
He has written to councils and district health boards around the country asking them to check they're complying with existing standards, and has set up a ministerial advisory group to develop new guidelines, admitting the Ministry of Health also has some culpability.
"The report is very critical of the Ministry of Health's Response over the past 10 years. It really does find that they have fallen short - there's no way of avoiding that. The report is very clear there has been a failure of leadership from the centre."
He acknowledges while bigger cities won't have too much difficulty upping their game, smaller councils might not have the funds to shift to a fully treated water supply.
"The smaller councils, there will have to be a longer conversation because some of them will face some infrastructure hurdles."
Local Government NZ president Dave Cull said it was "all very fine saying these standards have to be met", but councils "don't have a big piggy bank ready to pay things".
"It's the communities that have to pay, and that's what this report hasn't addressed," he told RNZ on Wednesday.
Christchurch is the biggest jurisdiction with an untreated water supply. City services manager David Adamson told Fairfax it would cost $100 million to set up a treatment regime, and $5 million a year to run it.