Meet Jacinda Ardern, 37, New Zealand's Next Prime Minister

NZ First leader Winston Peters arrives at Wellington airport on Monday morning to meet with his board as coalition talks

As for her first statement as the country's next leader, Ardern said her party is now focused on "forming a strong and durable government that can deal with the many challenges this country faces".

Ms Jacinda Ardern will become New Zealand's youngest prime minister in more than 150 years, after winning the backing of a minor nationalist party to form a coalition government.

Peters had promised to reveal his choice on Thursday afternoon but had already missed several self-imposed deadlines to settle the issue.

"We have had a period of intensive negotiations and I'm satisfied that the agreement we've reached with New Zealand First would be able to form the basis of a strong and cohesive government", he said.

Mr Peters said in his announcement that his party's perception of how capitalism needs to change influenced its decision.

"It is an absolute honour and a privilege to have the ability as Labour Party leader to form a government for all New Zealanders", she told reporters, saying it was "an exciting day".

Peters has been kingmaker in two previous elections, opting for National in 1996 in return for being made deputy prime minister and backing Labour in 2005 after it agreed to make him foreign minister.

New Zealand's currency fell by about 2 per cent as the result became clear, with the New Zealand dollar trading at $0.70. "I won't let disappointing & false claims stand in the way of that relationship". "I have also contacted the Australian High Commission to register my disappointment and will be meeting with the High Commissioner later today".

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"If we don't turn it around, and you've all got your different views, but if you were remotely neutral and you examined New Zealand - where it once was as a country in the Western world to where it is now. you'd have to admit we've done very badly".

Malcolm Turnbull has reportedly texted Ms Ardern to offer his congratulations. Peters has been offered the deputy prime minister role in the coalition government. She said she was fine answering such queries, since she had previously spoken publically about the topic.

"I greatly value New Zealand's relationship with the Australian Government", Ms Ardern said.

"It would be unprecedented for a Foreign Minister to pre-empt the Prime Minister in terms of giving congratulatory calls".

Labour and New Zealand First both campaigned on reducing immigration, increasing home construction and reforming the central bank.

The policies of New Zealand First are nationalistic and eclectic.

At the time of the spat, Ms Ardern admitted it was unacceptable for Labour MP Chris Hipkins to ask questions Mr Joyce's citizenship in Parliament and said it should not have happened. "My team and I look forward to building and strengthening the connection between our two nations - and I trust the Government shares this commitment".

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