Jacinda Ardern hints water tax has been canned

Labour's water tax appears to be off the table, with Prime Minister-elect Jacinda Ardern saying Winston Peters was "very firm" on the controversial levy.

Ms Ardern on Thursday night found out she would be the country's next Prime Minister the same time as the rest of us, when New Zealand First leader Mr Peters made his decision public just after 7pm, 25 days after the election.

While the exact policy agreements between NZ First and Labour are yet to be made public - and in some cases, still being finalised - Ms Ardern told The AM Show on Friday morning while she was "still sticking to the goal of improving our waterways", Mr Peters "campaigned very firmly" against it.

"We are going to release the details early next week. People will understand that Mr Peters campaigned very firmly on that issue. I campaigned on water quality - I'm still sticking to the goal of improving our waterways... but I can tell you Mr Peters was very firm on that."

Other policy concessions to NZ First are yet to be revealed. Ms Ardern said Labour's first 100 days programme emerged "by and large" unaffected, with "a few exceptions".

"We'll be looking to get through as much as we can before the end of the year," she said, with the caveat the lengthy negotiation process had eaten into Parliament's remaining sitting days.

Labour's retained its immigration policy, she said, which falls somewhere between NZ First's hardline reductions and National's laissez-faire approach.

Setting up the new Government

Before Parliament can sit again, Ms Ardern needs to finalise who's going to be doing what. Labour's caucus will meet Friday afternoon and vote on its own 16 Cabinet members, with NZ First's four members to be confirmed early next week.

The Greens will hold three ministerial positions outside of Cabinet.

"Generally you have to have a total ministerial allocation of around 28, so that leaves four or five Labour ministers outside of Cabinet," said Ms Ardern.

She says having NZ First MPs inside Cabinet will make it "as proportionate as possible", reflecting the relative strengths of each party.

"New Zealand First brings nine votes, Greens bring eight. New Zealand First have four seats at the table, the Greens three. Calculating that relative to our support, I think that was a fair-minded way to approach these negotiations and that allocation."

The Greens appear likely to pick up climate change, with Ms Ardern saying they'll get portfolios in "areas of strength". Child poverty could be another, but Ms Ardern has often cited in the past that was a particular passion of hers.

Mr Peters is yet to confirm whether he'll take up the role of Deputy Prime Minister.

"I understand that Mr Peters and his team may want to take some time to reflect on some of those final portfolio allocations… I have no sense whether or not Mr Peters will accept that offer or not."

Dark clouds on the horizon

Mr Peters in his speech on Thursday night warned of dark days ahead on the economic front.

"Don't come blaming me when things are bad - I'm just giving you a warning now," he said.

It's a warning backed up by BERL economist Ganesh Nana, who told The AM Show there is likely to be an economic downturn regardless of who is in Government.

Ms Ardern said it was "only fair of Mr Peters to reflect on what might be on the horizon for this Labour-led Government, to make sure that people have some anticipation that we will potentially have a rocky road in front of us".

"If you have an economic outlook that's affected by international markers then of course, it's your job to manage them, but we can't always control what we face. Of course, no one blamed the National Government for the GFC, for instance."

Mr Peters also said in his speech capitalism needed to "regain its responsible, its human face". Ms Ardern backed this up, saying everyday Kiwis weren't benefiting from the recent economic boom.

"A strong sense we got during the election was prosperity in this country is not being evenly shared. The old idea that you could work a 40-hour week and you'd be able to survive and support your family on that seems to be a part of our distant past. We believe we can turn that around, we believe we can change that."

Ms Ardern expects swearing-in to take place late next week, after which she'll become New Zealand's second-youngest ever leader, and youngest Prime Minister.