Waiariki MP Te Ururoa Flavell is calling for a concerted effort from businesses and local and central governments to come together and consider options for affected Kawerau mill workers.
The Norwegian owner of the Tasman Pulp and Paper Mill in the Bay of Plenty town is halving production and making more than 100 people redundant.
Norske Skog is blaming a drop in demand for newsprint for its decision to close one of its newsprint machines at the mill.
Flavell says with close to 300 workers at the mill the job losses will have a significant impact on the local community.
The Maori Party MP said the announcement "is typical of small town recessionary impacts having big consequences".
The newsprint machine closure was one of the ironic consequences of technology transfer and was no doubt inevitable but the community should not be left bearing the brunt alone.
"While we welcome the consultation process with affected employees, we hope that there will be a solid focus on options for further training and employment," he said.
"We need to take a comprehensive approach towards long term planning to turn this situation around."
Flavell pointed out that Kawerau has just celebrated the return of its Silver Medal Olympian, Sarah Walker, "whose years of hard work and dedication paid off on the BMX circuit in London at the greatest sporting event in the world".
"We need to apply the same successful formula to this new situation - taking a long term approach to achieve sustainable economic prowess and full employment," he said.
'Deepening jobs crisis'
The mill job losses follow the announcement of 120 redundancies at Solid Energy's Huntly East mine, up to 400 jobs in the balance at Spring Creek, and last week's announcement that 100 jobs will go at the Tiwai Point aluminium smelter by November.
The Engineering, Printing and Manufacturing Union is warning of a deepening jobs crisis following Norske Skog's announcement.
The EPMU will now consult with the company over the redundancies.
EPMU national secretary Bill Newson said Norske Skog's announcement is a blow to the community and a sign of a growing jobs crisis in New Zealand.
"The local economy in Kawerau is heavily reliant on the mill, and these job losses will have an impact throughout the community," Newson said.
"We'll be working to save as many of these jobs as possible through the consultation, but the eventual outcome will almost certainly be large scale redundancies."
Newson said the tragedy is that while there's little that could be done to avoid falling demand overseas, our high exchange rate has helped to make the Kawerau mill uncompetitive and contributed to the loss of jobs.
"It's particularly galling that at the same time Norske Skog is cutting jobs in New Zealand, it's actually investing in jobs in across the Tasman thanks to the support of the Australian Government. It's time our Government showed the same kind of support for Kiwi jobs."
Newson said no one is blaming the Government for the state of the global economy, but there are things it could be doing to help protect local jobs and encourage a thriving manufacturing sector so people who do lose their jobs don't have to join the dole queue or leave for Australia to find work.
"We're calling on the Government to look at ways to stabilise the exchange rate and bring it under control, for example by supporting changes to the Reserve Bank Act to protect jobs and promote growth."
"We also need a return to the focus on jobs that we saw at the time of the Jobs Summit," he said.
New Zealand will never build a high wage economy without a plan to support a modern, innovative manufacturing sector, and the Government needs to recognise that won't happen unless it takes a more active role in the economy, Newson said.
"Mass redundancies are becoming an all too familiar pattern, and as they continue to pile up it's becoming clearer just how badly the Government's hands-off approach is failing New Zealand."
Unless the Government changes course urgently the jobs crisis will only get worse, Newson said.