This paper examines the current freshwater resource management regime and allocation of fresh water under the Resource Management Act 1991. It examines the concept of first-in first-served in the allocation of the resource and questions whether this approach achieves the sustainable management principles of the RMA. Balancing competing interests is an underlying issue in the management of water resources and current policy on the part of central government and the courts. Powers over allocation methods have been delegated by central government to regional and district councils, which are required to formulate and implement rules on allocation of water resources. The first-in first-served approach has for some time been adopted by the councils and the courts. The future of this approach is, however, open to scrutiny due to sustainability and increased demands on the resources. Sustainable concepts may be at risk if there is a strict adherence to the concept of first-in first-served in allocation of water resources and this paper concludes that central government should provide councils with direction on alternative allocation management, such as a quota regime and/or market-based approaches.