Health Minister David Clark says the second report into the Havelock North gastro outbreak paints a damning picture of his ministry.
The report, released today, warns that hundreds of thousands of New Zealanders - one in five people - are at risk of getting sick.
Thousands were made sick in August last year from campylobacter in the village's drinking water. Dozens were hospitalised, and at least three were left with a chronic condition called Guillain-Barre syndrome.
The report calls for more treatment of water supplies. It said complacency was rife among councils, and there was a lack of leadership in the health ministry.
Photo: RNZ / Alexander Robertson
Health Minister David Clark told Checkpoint with John Campbell his concerns about leadership in the ministry was partly why he has appointed a ministerial advisory group to deal directly with him.
"We don't want a panicked response" - David Clarke
He said the report highlighted a "major infrastructure deficit" in the country, although the majority of water reached the current standard.
"The word 'urgent' is used a lot in the report and we want to move swiftly, there is no question about that," Dr Clarke said.
"This is a serious report that raises serious questions."
He said the report revealed that no compliance notice has been issued since the drinking water standards were update in 2007.
"They were world leading in 2007, I think we need to note that, and there was a period of grace for councils and suppliers to make sure the water was safe.
"The previous government extended that period of grace and even when that ended they didn't issue a single compliance notice."
He said some smaller locals councils would struggle to fund the infrastructure needed to provide safe drinking water and the government would be speaking with them.
Health Ministry 'woeful'
Water NZ represents about 1500 corporations and individuals in the water sector.
Its chief executive, John Pfahlert, told Checkpoint with John Campbell the report showed the Ministry of Health's performance was "woeful", although industry also needed to make changes.
He said at the very least the current water standards needed to be enforced.
"It's a bit like speeding while driving a motorcar. If you know that there's not a snowballs chance that you're ever going to get prosecuted or pulled over there's no disincentive to behaviour.
"What the Havelock North incident shows is that when it goes wrong it goes wrong really badly, with the potential to infect or kill very substantial numbers of the population."
He said he supported the establishment of an independent water regulator.
"We think that the function should be taken out of the Ministry of Health and put with a standalone organisation."
"We are a first world country we should be providing water of the very highest quality" - John Pfahlert