New Zealand's new prime minister called capitalism a "blatant failure", before citing levels of homelessness and low wages as evidence that "the market has failed" her country's poor.

Jacinda Ardern, who is to become the nation's youngest leader since 1856, said measures used to gauge economic success "have to change" to take into account "people's ability to actually have a meaningful life".

The 37-year-old will take office next month after the populist New Zealand First party agreed to form a centre-left coalition with her Labour Party. They will be supported by the liberal Greens.

New Zealanders had been waiting since 23 September to find out who would govern their country after national elections ended without a clear winner.

Ms Ardern has pledged her government will increase the minimum wage, write child poverty reduction targets into law, and build thousands of affordable homes.

Best sights on New Zealand's South Island Show all 14 1 /14 Best sights on New Zealand's South Island Best sights on New Zealand's South Island Hokitika Gorge Scenic view of lake Hokitika Gorge, Hokitika, South island New Zealand, Travel Destinations Concept Getty Best sights on New Zealand's South Island Lake Tekapo Turquoise Lake Tekapo under blue summer sky. Famous snow covered Aoraki Mount Cook in the background. Aoraki Mount Cook National Park, Caterbury, New Zealand. Getty Best sights on New Zealand's South Island Mount Cook Road to Mount Cook, the highest mountain in New Zealand. A scenic highway drive along Lake Pukaki in Aoraki Mount Cook National Park, South Island of New Zealand. Shot at Highway 80 (Mt Cook Road). Getty Best sights on New Zealand's South Island Waiau River, Hanmer Forest Park Aerial view of Waiau River and Hanmer Forest Park, New Zealand. Getty Best sights on New Zealand's South Island Fox Glacier Closeup stock photograph of the Fox Glacier located in the Westland Tai Poutini National Park on the South Island of New Zealand. Getty Best sights on New Zealand's South Island Lake Wanaka New Zealand Getty Best sights on New Zealand's South Island Milford Sound Milford Sound, South Island, New Zealand Getty Best sights on New Zealand's South Island Marlborough Sounds Mussell farms in the Marlborough Sounds, New Zealand Getty Best sights on New Zealand's South Island Fiordland National Park Beautiful waterfalls on a cloudy day in the Sounds Getty Best sights on New Zealand's South Island Abel Tasman National Park Abel Tasman National Park, New Zealand Getty Best sights on New Zealand's South Island Split Apple Rock, Abel Tansman National Park Split apple rock with seagull on top next to Kaiteriteri beach, Abel Tasman National Park, New Zealand, South Island in summer closeup photo Getty Best sights on New Zealand's South Island Larnach Castle Port Chalmers, Dunedin, New Zealand-December 12,2016: Faade of the mock Larnach Castle on a cloudy day in Dunedin, New Zealand Getty Best sights on New Zealand's South Island View from Larnach Castle over the Otago Peninsula Port Chalmers, Dunedin, New Zealand-December 12,2016: Scenic view from the top of Larnach Castle over the Otago Peninsula in Dunedin, New Zealand Getty Best sights on New Zealand's South Island Queenstown Panoramic view from remarkable peak at queen town famaus place in new zealand Getty

In her first full interview since becoming prime minister-elect, she told current affairs programme The Nation that capitalism had "failed our people".

"If you have hundreds of thousands of children living in homes without enough to survive, that's a blatant failure," she said. "What else could you describe it as?"

Lacinda Ardern receives a standing ovation as she arrives at Parliament after agreeing a deal to form a coalition government (Getty Images)

Incumbent prime minister Bill English, whose National Party has held power for nine years, has said his party grew the economy and produced increasing budget surpluses which benefited the nation.

But Ms Ardern said: "When you have a market economy, it all comes down to whether or not you acknowledge where the market has failed and where intervention is required. Has it failed our people in recent times? Yes.

"How can you claim you've been successful when you have growth roughly three per cent, but you've got the worst homelessness in the developed world?"

The Labour leader said her government would judge economic success on more than measures such as GDP.

Jacinda Ardern becomes the youngest female Prime Minister of New Zealand

"The measures for us have to change," she said. "We need to make sure we are looking at people's ability to actually have a meaningful life, an enjoyable life, where their work is enough to survive and support their families."

Ms Ardern, who became Labour leader just two months ago, will be the youngest female premier of any developed economy in the world.

The leader of New Zealand First, Winston Peters, said his party had opted for change from the “status quo” as he announced his party would enter coalition with Labour instead of the National Party.