The same smoke haze had also turned some of the South Island's snowy peaks and glaciers a caramel-coloured brown, as smoke blanketed the area and left patches of ash on the snow.
Penney said a public health warning was needed to alert New Zealand to the problem, as the smoke from Australia was likely to return.
She has also raised her concerns with the industry body Water New Zealand and government agencies.
Dunedin City Council infrastructure services general manager Simon Drew said any risk to human health was likely to be "low" and "probably no higher than in winter when household fires are being used".
"However, it would seem timely to remind communities of all the risks to rainwater collected from roof supplies.
"There is always a risk when drinking rainwater collected from roofs that is stored in a local tank."
Drew said ash crossing the Tasman would have been very fine, and its impact "incredibly localised", requiring calm conditions to settle.
Dunedin's municipal supply was not affected, and a "first-flush" device — a pipe diverting the first rainfall and debris from roofs and gutters away from the collection tank — would protect private rainwater collection tanks, he said.
Boiling water for one minute would also remove any microbiological contamination, although not necessarily any taste or odour issues, he said.
Water New Zealand technical manager Noel Roberts said the contamination of rainwater tanks would be "more of a taste issue, rather than a quality issue".
The smoke would not be carrying firefighting chemicals across the Tasman with it, but "you're certainly going to get the taste, like ... [smoke]."
He also encouraged people with rainwater tanks to install first-flush devices to protect against contamination, including bird droppings.
