Good faith will be critical to the success of the new Labour-New Zealand First government, former Prime Minister Helen Clark says.

Photo: RNZ

Miss Clark, who is travelling in Europe, said she was able to listen in live to Winston Peters' press conference yesterday afternoon when he announced that his party would go into coalition with Jacinda Ardern's Labour Party.

She told RNZ's Morning Report she was "hardly daring to hope" that Labour would be able to form a government.

"Full congratulations to Jacinda, who in just a few weeks took the Labour Party from despair to this very, very exciting outcome of negotiations."

Miss Clark's three-term Labour government included three years in coalition with New Zealand First, with Winston Peters as Minister of Foreign Affairs.

"Let me say for the record, everything that New Zealand First committed to do in its agreement with Labour, it kept its word on," she said.

For the new coalition to succeed, good faith would be critical.

"Don't surprise your partner, constant communication ... It can be done and over nine years I was able to show we can run reasonably smooth governments."

Prior to being elected as an MP, Ms Ardern worked in the office of the Prime Minister when Miss Clark held the top job.

It was always a possibility she would end up where she is now, Miss Clark said.

"She's a hard worker, I think she's reflective … She wants to do good, she wants to make New Zealand a better place, and I think she's shown that she has the leadership capacity to get on and do it."

Ms Ardern's rise to the prime ministership was an "extraordinary performance", Miss Clark said.

"No fair person could have failed to be impressed by the way she took to the job of being leader like a duck to water - she just sailed on and up."

Miss Clark said the new government stood for a "fairer, better, more sustainable" New Zealand.

"Like many people I've been very concerned to see the reports of homelessness and more abject poverty. I think the issues of water quality are huge ... and I welcome the emphasis Jacinda has put on acting on climate change."