Helen Clark is confident Prime Minister-in-waiting Jacinda Ardern and Winston Peters will be able to work together.

The New Zealand First leader has decided to form a government with the Labour Party.

The Green Party will be in a confidence and supply agreement.

The former Prime Minister said Winston Peters was her Minister of Foreign Affairs for three years and never let her down.

She told Rachel Smalley it's now up to Jacinda Ardern to carry on as she's begun.

"She's successfully negotiated with Winston Peters as he has with her. They have a deal, the Greens are part of that deal. They can make it work."

She said Jacinda Ardern is a natural communicator.

"She's very courteous, she's reasonable but she's also firm. She knows where she want to to lead the Labour Party and now New Zealand."

Clark said for years people have been asking her to come back.

"I say no, no, no the next generation must step up and what really excites me is the next generation has now stepped up."

She said low home ownership, homelessness, water pollution, and a poor mental health system are among the issues 

"So, they have challenges but I am absolutely confident that they will be focused on fixing those problems."

LISTEN ABOVE AS HELEN CLARK SPEAKS WITH RACHEL SMALLEY