Ardern to lead New Zealand liberal government

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Jacinda Ardern is to be the New Zealand Prime Minister, the country's third female to lead.

The outcome of a national election almost a month ago only became clear Thursday after the small New Zealand First party chose to back Ardern's liberal Labour Party.

The First party's announcement gave Ardern's Labor Party enough numbers to form a coalition with the First party and with the Greens. They will need the support of the eight Green party MPs to overcome the 50% +1 threshold to pass legislation.

In a letter to Green Party supporters leader James Shaw said Labour had also secured his party's support by agreeing to a significant boost to the national conservation budget, addressing the gender pay gap in the public sector, increasing funding for social issues, overhauling the welfare system and establishing an independent climate commission.

Ardern, who took over the Labour leadership less than three months ago and is now set to become New Zealand's youngest leader since 1856, said she was still processing her meteoric rise.

Praising Ardern's "extraordinary talent" in the campaign, Peters backed her pledge to build thousands of affordable homes per year.

"It is an absolute honour and a privilege", she said.

The new leader said she had received congratulations from Australian Prime Minister Malcolm Turnbull, Britain's Theresa May and Canada's Justin Trudeau.

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After she took control of Labour, the party surged in the polls, leading the press to coin the term "Jacindamania".

At the start of the year, English - who replaced former National leader John Key in December - was in a strong position and looked certain to continue Key's electoral success.

On Thursday evening Ardern celebrated her appointment to the top job by returning to her Wellington studio apartment with partner Clarke Gayford and eating a pot of noodles.

Still, the incumbent National party government began to expose a perceived weakness around the opposition's tax plans and remained favourites.

Ardern was speaking on TV3 show The Nation.

Asked how she reacted in that moment, Ms Ardern replied: "I felt an overwhelming sense of ... being incredibly honoured, privileged and humbled".

New Zealand First is expected to extract policy concessions and win some ministerial posts by joining the Labour coalition. He said his party believed "capitalism must regain its ... human face".