A nice, down to earth article has appeared in Stuff on the solution to the shortage of water in Auckland. It is written by Eric Crampton and is called "Water is too precious to be so cheap".
Instead of rationing, Auckland should be better pricing water. Cheap prices encourage the wasteful use of water. And for those who worry that low income folks may do worse under higher prices, then think again. The extra revenues gained from the wealthy who are using lots of water to fill pools and water gardens could be used to grant rebates that would make low income consumers better off than they are under the current system. Here is Eric's full article: