Jacinda Ardern: 'If you have hundreds of thousands of children living in homes without enough to survive, that's a blatant failure.' Photo Getty

Incoming prime minister Jacinda Ardern says capitalism has been a "blatant failure" in New Zealand when measured by child poverty.

When asked if capitalism had failed low-income New Zealanders, the Labour leader said: "If you have hundreds of thousands of children living in homes without enough to survive, that's a blatant failure. What else could you describe it as?"

Ardern was speaking on TV3 show The Nation.

Host Lisa Owen was probing Ardern for her view whether capitalism had failed, on a scale of one to 10, in response to coalition partner and New Zealand First leader Winston Peter's statement that many Kiwis were correct when they considered capitalism to have been a foe.

Ardern said there had been market failures in New Zealand such as the country having the worst homelessness in the developed world, most people's incomes not keeping up with inflation, and the cost of housing outstripping most people's reach.

"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 3 per cent, but you've got the worst homelessness in the developed world?"

She said the measures of success must change away from just counting economic growth.

They needed to include things like people's ability to lead a meaningful life, enjoyment of life, and whether their income was enough to survive and support a family.

Ardern said her administration, a Labour-NZ First coalition supported by the Greens, would be an active one in addressing the failures of New Zealand's market economy.