The Prime Minister is rejecting Labour MP Deborah Russell's remarks about the strength of small businesses pre-lockdown and the suggestion that small businesses hadn't prepared enough financial reserves.
"I disagree with those comments and the Minister of Finance did as he appeared at the time," Jacinda Ardern told reporters at her daily COVID-19 press conference.
Dr Russell has come under fire over her remarks to the COVID-19 Epidemic Response Committee on Tuesday when she raised concerns about small and medium enterprises (SMEs) with Finance Minister Grant Robertson.
"We are seeing a number of small businesses are really struggling after only a few weeks in a pretty bad situation, which must speak to the strength of those small businesses going into this lockdown," Dr Russell said.
"It worries me that perhaps people went into small business without really understanding how you might build up a business or capitalise in the first place so that you have the ongoing strength to survive a setback."
Robertson shot her down, saying: "I'm not sure I totally agree with that prognosis."
Dr Russell's remarks have been described as "utterly tone-deaf" by left-leaning political commentator Chris Trotter, "gobsmacking" by right-leaning commentator Trish Sherson, and "offensive" by host of The AM Show Duncan Garner.
In a statement to Newshub, Dr Russell said: "I'm really concerned about small businesses. People work hard to get them up and running, and they are an incredibly important part of our communities.
"My questions to ministers in the select committee yesterday were about understanding what is being done to help small businesses survive, and what we can do to help them to become more resilient in the difficult times ahead."
But Dr Russell wasn't the only Labour MP to raise eyebrows during the committee hearing.
Small Business Minister Stuart Nash could not provide any details about how extending the lockdown for a week would affect SMEs, prompting criticism from the Opposition for not showing up with any analysis.
Employment Minister Willie Jackson was not able to say how much unemployment will rise as a result of the extended lockdown, but he did admit that for each day New Zealand is at alert level 4 and level 3, unemployment will rise.
"Another week is not trying to hurt or destroy anyone," Jackson said, referring to spending another week in level 4, to which National MP Todd McClay retorted: "There is obviously going to be pain for small businesses out there."
In defence of her ministers, Ardern said Treasury had already put out a range of scenarios about the extension of lockdown. One of them showed up to 26 percent unemployment if the lockdown was extended by up to six months.
"You can understand how it would be quite difficult to get into granular analysis around the size of those SMEs who are within the group who continue to be unable to operate at full strength, so there's a number of variables that would make that hard," Ardern said.
"What we do know, though, is that from the wage subsidy we've put out, almost three quarters of it has gone to SMEs, so we were very aware when we came to designing the packages that SMEs were going to be some of the most affected groups by New Zealand's response."
She highlighted the Government's packages to date that aim to help SMEs, including the wage subsidy which has paid out about $10 billion so far, a deferral of ACC invoicing, and restrictions on the cancellation of commercial leases.m
The Government has also agreed to take on 80 percent of the risk of large bank loans. Businesses with annual revenue between $250,000 and $80 million can apply to their banks for loans up to $500,000, for up to three years.
Ardern said the options have "all been with SMEs in mind because New Zealand is predominantly a country with small and medium enterprises, so it has driven much of our decision-making".
