Freedom Convoy protesters gathered outside, protesting against restrictions of the Covid-19 response.
Ardern focused mainly on the Covid-19 response as the Government negotiated the Omicron outbreak and prepared for future variants.
She said the Government was committed to keeping schools open after a disrupted two years for students and teachers during lockdowns.
"The latest evidence shows that school closures are finely balanced. They can cause significant indirect harm to children, including widening educational inequities, poorer mental health, behavioural difficulties, social isolation, family stress, family violence and food insecurity."
She said they also had a disproportionate impact on Māori and Pacific children, as well as those from poorer households.
"We are committed to keeping schools and early learning services open, with closures only as a last resort due to a significant outbreak in a school or service, staff absences that make it unsafe to operate, or a local lockdown."
Ardern said the focus for the Government was on improving the health system to deal with the upcoming winter, and the influenza vaccination rollout would be critical to help reduce the risk of "unnecessary pressures" on the health system: a double-header flu and Covid outbreak.
Speaking to media afterwards, Ardern said that although flu rates had been low since the borders closed, the RSV scare last year showed how much pressure outbreaks could put on the health system. The Government was expanding the eligibility for free flu jabs, and would run a vaccination campaign and use the Covid-19 infrastructure to roll it out.
Soon after her speech, Health Minister Andrew Little announced the eligibility would widen to cover about 250,000 more people, meaning about two million would qualify for it.
Ardern also said New Zealand was in a better position now than most other countries it compared itself to and credited the Government's Covid-19 response with protecting New Zealanders from the "Delta destruction" other countries had faced.
However, National Party leader Christopher Luxon took aim at that Covid-19 management, saying although 2020 had been strong, 2021 had been a "shambles".
He dedicated most of his speech to the economy and cost of living, point to the rising cost of petrol and groceries, the wage gap between New Zealand and Australia, and the steep increase in house prices.
"You get a Prime Minister who promised to make housing more affordable, but instead she's delivered the largest, the fastest increase in house prices in our nation's history. The average house price is now over $1 million, and in just four years of Labour mismanagement we've seen house prices rise by a staggering $380,000. It's a truly shocking result of Government incompetence."
He also predicted that Labour would end up backing down on its three water reforms, saying Finance Minister Grant Robertson would decide it was too unpopular to go ahead with.
Ardern had confirmed in her opening statement that the Government would forge ahead with Three Waters this year, after it was delayed last year for more consultation because of opposition from councils.
"It is clear that without our plan to establish four publicly owned water service entities we will continue to see a frail network and contaminated water in many communities. To delay will only push the problem on, and increase future household costs."
Ardern's speech also looked at other priorities on the Government, including the health reforms. The reforms will abolish the district health boards and set up a Health NZ agency and Māori Health Authority alongside it. Ardern said the pandemic had shown the weaknesses of the current system.
Other areas of focus included climate change and environmental measures, child poverty, housing supply, and the infrastructure projects the Government has announced, including in transport and schools.
