In a reshuffle the Prime Minister had previously described as being only "minor," Jacinda Ardern has stripped senior Minister Phil Twyford of his Housing portfolio and given it to Megan Woods.
Woods – also a senior member of Ardern Cabinet – has been put in charge of the Government's whole building programme and will lead a team of Housing Ministers.
Twyford, who was by far the biggest loser from the reshuffle, said he was looking forward to helping Woods with the Government's housing programme.
"I'm as frustrated as anyone else that we have not been able to deliver as many KiwiBuild houses as we had hoped," he said.
Ardern said KiwiBuild has stood out as an area that "needs a sharper focus" and the Housing portfolio was "too great for one Minister".
Kris Faafoi was one of the biggest winners of today's reshuffle; he was promoted into Cabinet and picked up the portfolio of Government Digital Services.
He also joins the new team of Housing Ministers, in charge of the Public Housing aspect of the team.
All Ministers retain their existing Cabinet ranking – meaning Twyford remains at number five.
Speaking to media this afternoon, Ardern said that KiwiBuild had not progressed as well or as quickly as she hoped or expected.
But the challenges in fixing the housing crisis were "too great for one Minister".
"Therefore I am putting in place a team of senior Ministers to deliver the full breadth of our housing plan, from KiwiBuild right through to tackling homelessness."
That team, led by Woods, is also made up of Nanaia Mahuta who is in charge of the Government's focus on Māori housing.
Twyford will be responsible for the urban development side of the programme and the legislative changes needed to ensure more affordable houses and infrastructure can be built.
But Ardern said reshuffling Twyford out of Housing was not an admission of failure – it was an admission that the portfolio was "a huge job".
It was also an admission that "we have got things wrong with KiwiBuild," adding that there is "no blueprint for what we're doing here".
Ardern said she has been working with Twyford on these changes for some time.
Focus now turns to the KiwiBuild "reset" which, earlier this month, Twyford confirmed would actually be a reset of the whole building programme.
The policy has been lacklustre. Of the 1000 KiwiBuild homes Twyford promised would be built by July 1, just 120 have been built.
The reset will be unveiled in the coming weeks.
Faafoi keeps his Broadcasting, Communications and Digital Media portfolio and remains the Minister of Commerce and Consumer Affairs.
"Kris Faafoi has done an outstanding job as a Minister outside of Cabinet and now joins the Cabinet based on his performance this term," Ardern said.
His Civil Defence responsibilities were given to Peeni Henare.
Meanwhile, his place as a Minister outside Cabinet has been allocated to Poto Williams.
She also becomes the Minister for the Community and Voluntary Sector.
Despite her promotion, the reshuffle means there are only 30 per cent women in the Cabinet.
Ardern said that was disappointing.
"I'm a member of a Labour Party – making sure we improve those numbers is important to me, personally but also to the party."
Other changes include that Ruth Dyson will be nominated for the role of Assistant Speaker and Michael Wood becoming the Senior Government Whip.
Megan Woods – Picks up the Housing portfolio. She loses Government Digital Services and is no longer the Minister Responsible for the Earthquake Commission
Kris Faafoi – Becomes a Minister, picks up the Government Digital Services and Associate Minister of Housing (Public Housing). He loses the Civil Defence and Customs portfolio and is no longer the Associate Minister of Immigration.
Phil Twyford – Loses the Housing portfolio. He gains Economic Development.
Poto Williams – Promoted to Minister outside of Cabinet and becomes the Minister for the Community and Voluntary Sector, The Associate Minister for Greater Christchurch Regeneration, the Associate Minister of Immigration, and the Associate Minister for Social Development.
David Parker – Loses Economic Development
Nanaia Mahuta – Picks up Associate Minister for Trade and Export Growth.
Grant Robertson – Becomes Minister Responsible for the Earthquake Commission.
Jenny Salesa – Picks up the Customs portfolio. Loses the Associate Minister of Housing and Urban Development portfolio.
Peeni Henare – Picks up the Civil Defence portfolio and becomes the Associate Minister of Tourism. He loses the Associate ACC and the Associate Minister of Tourism portfolio.
Ruth Dyson – Will be nominated for the role of Assistant Speaker. She will no longer be the Government's Senior Whip.
Michael Wood – Becomes the Senior Government Whip. He gives up his roles as Parliamentary Under Secretary to the Minister for Ethnic Communities and Chair of the Finance and Expenditure Select Committee.
Priyanca Radhakrishnan – Becomes the Parliamentary Private Secretary for Ethnic Affairs.
Willow Jean Prime – Becomes Parliamentary Private Secretary for Local Government.
Deborah Russell – Gives up being Chair of the Environment Select Committee and becomes the Chair of the Finance and Expenditure Select Committee.
Duncan Webb – Becomes the Chair of the Environment Select Committee.