"Much of our irrigation in drier areas is on a run-of-river basis, a model extremely vulnerable to drought given environmental obligations," the report says.
"New Zealand's dependence on agricultural exports and urban reservoirs may yet be a recipe for drought vulnerability. Changing drought risk will have an impact on our society in many ways including on water supply, wastewater, stormwater and primary production among others."
Curtis says it's positive the Government is looking at how water services will be delivered in the future.
"The next step is to develop a national approach to plan for improved water storage for both urban and rural communities.
"Local and regional water storage infrastructure can be expensive to design and construct but the need for this investment will become more critical in the future.
"We will also need new infrastructure in regions where this hasn't previously been required as rainfall and river flows change."
Curtis says the recent decision by Tasman District Council to proceed with constructing a new dam to supply residents, businesses and growers with water is the kind of investment that will increasingly be needed in the future.
"The project is critical to avoid severe water restrictions for urban and rural water users, and also provide for environmental river flows," he adds.
Curtis says that improving water use efficiency will also continue to be a priority.
"Farmers are already investing in more efficient irrigation systems and New Zealand has very efficient systems operating by world standards.
"Regional councils are continuing to require that farmers adopt more efficient irrigation systems and irrigation schemes are also modernising their networks to install piped systems which reduce water loss.
"Urban areas are also looking at programmes to improve and encourage water use efficiency."
KEY POINTS
* NIWA projections indicate droughts are expected to become more severe in most areas and more frequent in already drought-prone regions.
* Seasonal rainfall patterns will also change, according to the Ministry for the Environment. For example, in spring, there may be less rain in eastern and northern regions and more rain in summer in eastern areas while western areas will experience drier summers.
* Droughts in New Zealand were estimated by Treasury to cost $720 million from 2007-17, significantly higher than for flood-related insurance claims over the same period.