Key Points:

Helen Clark talks to the Herald on Sunday about Winston Peters, rugby and the price of milk

How has the rising cost of living affected you and Peter?

It doesn't affect us because we're in a very comfortable position. But if you're a family on the average income, the tax cuts that have just come through, the Working for Families increases, keeping the doctors' fees low and all the other things we do are very important at present.

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You're going to be detailing aspects of the economic stimulus package over the weekend.

We've been very proud of getting unemployment cut in half over the time we've been in government and we don't want to see unemployment surge, so we are prepared to bring forward investment... to keep employment levels high.

You've already confirmed details of the Wellington to Palmerston North rail project. What about the Marsden Point rail spur?

These will be high priorities. The world economy is going to make next year a reasonably slow year. So we have to be proactive. Now, I'm haunted by sitting around the table as a junior minister in the fourth Labour Government, with unemployment rising and essentially the Minister of Finance and the top 10 weren't prepared to do anything about it. Well, I'm not prepared to put up with that.

One of the other aspects of this stimulus package is state house retrofitting.

Not just state houses. We've got huge plans for retrofits. We do retrofits to people's own homes, as well as the state rentals. That's easily geared up and it does use unskilled labour - as does major work on the railway tracks. A lot of it is just solid work by men with hand tools.

You talk about men with hand tools. Doesn't that sound a little bit like the relief schemes of the Depression?

Well, no one has worked out any other way of lowering railway track, so the reality is that there's a lot of unskilled work involved in that. It's the same with retrofitting. And the first jobs to go are usually unskilled ones, so it's good you've got possibilities for doing something for those people.

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So these are unskilled relief schemes?

Well, it's public works investment. You take retrofitting - we've got a million old damp uninsulated homes in this country. You can make a tremendous difference to people's lives and health - and their power bills - by retrofitting. But the work itself is not necessarily skilled. People get underneath a house, they get in the roof, they do the insulation. So it's a good investment.

Will you be placing a bet on the Melbourne Cup next week?

If I was in the office and there was a whip-around, I might. It's unlikely.

All Blacks against Australia, do you expect to be watching that? It's quite late.

No, I've got an

Agenda

interview the next morning, so I won't be burning the midnight oil.

You've never pretended to be someone who's got a great personal interest in rugby. Is that something you've thought about trying to remedy, given how close it is to the national heart?

Hey, I'm Prime Minister of New Zealand. I flew to Dublin for four hours so I could help the Rugby Union pitch for the hosting rights to the Rugby World Cup. I follow whatever New Zealand's interest is.

When I last spoke to you in this room, a week out from the last election, you said you didn't know Winston Peters that well.

That was true. It probably still is.

You said you'd never actually governed with him, which you hadn't at that point. You have now. Do you feel you know him a bit better now?

Yes, a bit better... And I have to say that, working as a minister, I believe he did a pretty good job.

Would you have confidence in him as a minister in the future?

I would have no difficulty working with him in the future.

As a minister?

No difficulty. I take people as I find them, and I'm perfectly satisfied with the job he did.

You'd be happy to see him as foreign minister again?

All I'm saying is, I'm perfectly prepared to work with Winston Peters again, and I consider that his party operated honourably in the relationship it had with us.

He's always regarded himself as having done well as Chancellor - what we call Finance Minister now. Can you see him in that sort of role again?

Well, no, because Michael Cullen is the Finance Minister par excellence, so I'm not looking for any change there.

Michael Cullen's not going to be here forever, though, is he? He was talking about retiring last term.

Nobody's going to be here forever. Again, it comes back to what does New Zealand need at this time, and I think it needs a very senior and experienced team.

Is that because of the economic climate?

Absolutely. It's changed the whole dynamic of the campaign. What was a soft movement for change has turned into, "it's very worrying out there - who do we trust to have the skills to run this through?"

Assuming the Maori Party's there in some numbers, who will you be calling on the night if you're a position to make phone calls?

I'd be calling the range of people that we are accustomed to working with, and that's all five parties we've got a track record with.

To what extent do you believe the Maori Party is able to go with National, or do you think they will be more comfortable with Labour?

I think they will be very mindful of the expectations of their constituency. Overwhelmingly, Maori are saying that they want a Labour-led government.

Your biggest achievement in the past three years - in one sentence.

Some incredible things have been rolled out in the past three years. The enhanced KiwiSaver, enhanced Working for Families, a huge sustainability programme.

Choose one.

How do you choose? Well, enhanced Working for Families. That programme has lifted more than 130,000 children out of poverty. That's gotta be huge.

I would like to ask you what your biggest regret is about your handling of politics and policy in the past three years.

I have no regrets, and I wouldn't even dream of trying to manufacture them.

I'm sure you do have some regrets.

No regrets. Never look back.

How confident are you going into next week's election?

Very optimistic. There's a very great groundswell around the websites and around the shopping malls and other places I go.

POP QUIZ:

1. Who is the president of the Democratic Republic of Congo?

(Answer: President Joseph Kabila)

Is it still Kabila? I'm aware there's major issues in Goma. If they [the UN Security Council] are formally considering recruiting peacekeepers, yes, they ask in New York. But it would be unlikely we would be able to do much there. We're pretty stretched at the moment.

2. Do you know how much a litre of milk costs at present?

(Answer: $1.85 at Mt Albert Pak n' Save)

I hope it's coming down. It has been over two bucks, I guess.

3. You're quite keen for more people to be using public transport - any idea how much a one-stage Auckland bus fare costs?

(Answer: $1.60)

I'd have to ask Peter - he gets one stage home every night.

4. Given the level of taxation on tobacco, do you know how much a pack of 20 cigarettes costs?

(Answer: About $10)

Enough to deter you, I hope. Can you imagine that I would be running around checking the price of cigarettes? I loathe cigarettes. We actually pay out far more for smokers' diseases than we could collect in that tax.

5. The All Black fullback - any views on that debate?

(Isaia Toeava replaced Mils Muliaina in last night's starting line-up)

No, others more competent can enter that.