Jacinda Ardern is defending the Government's handling of the controversial Level Two law.

The Government appears to have bowed to public pressure, by allowing the legislation passed under urgency last week to go to select committee.

The law faced stiff opposition for being passed too quickly - and giving police too many powers.

But the Prime Minister told Mike Hosking the alternative was continuing a state of emergency. which gave police much greater powers.

“What we started with were very, very broad powers due to the fact we had a state of emergency. Our view was that it wasn’t appropriate to keep those in place.”

She said that Covid-19 is going to be with us in a while, and this law is a better long-term alternative than a state of emergency.

The Government has also agreed that the bill should be reviewed every 90 days.

Regarding the 10-person capacity for church congregations, she hoped the Government could move on the number of people that could gather together. "Those numbers will move in level 2... that will include church services."

The director-general of health would be reviewing the number of people who could gather after two weeks in level 2.

But she maintained people gathering together who knew each other well - such as at churches or family reunions - could not currently be done in large groups because it was too risky.

Many leaders, including Destiny Church's Brian Tamaki, have expressed their frustration at the 10-person limit, saying churches could easily comply with social distancing rules.

Meanwhile, Ardern told Hosking New Zealand had been very quick to move to support businesses and their employees; long term one of the most important things the Government could do was upskill the workforce.

"Every country will find itself needing to develop its economic recovery."

Asked about a possible Transtasman bubble, she said both she and Scott Morrison agreed that it would only work if everyone arriving from outside that bubble was quarantined. Only the transtasman border would not need a quarantine.

"The point is ultimately to allow New Zealanders and Australians to move freely between both countries...imagine if we're the only place you can go that doesn't require some kind of quarantine on return."

On China and its recent anger about New Zealand wanting Taiwan to have a place at the World Health Organisation, she said: "China is an incredibly important trading partner for us."

New Zealand had consistently maintained its One China policy since 1972 and that had not changed.

But in the wake of Covid-19 it was important to get perspectives from "places" all around the world, including Taiwan on Auckland's water shortage, Hosking asked if the PM could intervene on speeding up the Resource Management Act process so Watercare could take more water from the Waikato River.

She said Watercare had plans that it was working on right now to get more water.

She was receiving a report from David Parker on water issues today but said ultimately the solution for Auckland was finding alternative sources of water.