Prime Minister John Key has ridiculed suggestions the manufacturing sector is in crisis and laughed off plans to print money to save it.

At the weekend, the Green Party launched its proposal to rein in the high Kiwi dollar to stop further job losses.

Co-leader Russel Norman suggested the Reserve Bank use quantitative easing - the printing of more money - to buy earthquake bonds.

That would help pay for the rebuild of Christchurch and bring down the exchange rate, he said.

The Greens also proposed introducing a capital gains tax, except on family homes, and giving the Reserve Bank a broader mandate for changing interest rates.

But Mr Key criticised the idea, saying the manufacturing industry was not in crisis and printing more money did not make sense.

Exports in the manufacturing sector were 11.7-11.9 per cent of gross domestic product. The number of people employed in the sector had remained between 245,000 and 255,000 and in the last 12 months the sector grew about 2.5 per cent, Mr Key said.

"So there might be a crisis in the Greens but it's not necessarily in the manufacturing sector when you actually look at the accurate data."

The Greens' figures show a 17 per cent fall in the number of jobs in the sector since 2008, a 12 per cent decline in manufactured exports and a 12.9 per cent drop in the sector's contribution to GDP.

The Engineering, Printing and Manufacturing Union is hosting a job crisis summit on Friday in response to the manufacturing job losses.

Mr Key said he was not invited and would not go anyway. "There's no crisis in manufacturing in New Zealand."

Some companies were struggling but the high New Zealand dollar was two-pronged and meant the cost of imported parts and materials was down, he said.

Printing more money remained a hypothetical option, but one Mr Key did not support.

"I'd just encourage people to take a step back in their living rooms and think about this; if printing money is the way to go and that's going to bail out our problems in Christchurch, why don't we just print lots of money, give it to every New Zealander and they'll have a great Christmas.

"The reality is, it's a bit of a fool's paradise."

And it would not necessarily reduce the exchange rate if major trading partners such as the United States were still doing worse than New Zealand.

"The reality is, it hasn't made Zimbabwe a rich country, it's made them a very poor country. It would put up the price of virtually everything that New Zealand would buy."

Printing money had been disastrous in Zimbabwe, postwar Germany and Argentina, Mr Key said.

The United States and European countries were adopting the approach now because they were in crisis.

"I don't think we have a crisis, I don't think it makes sense for New Zealand, I don't think it's worked very well in other countries, I don't think it would guarantee a lower exchange rate."

Labour does not support enforced quantitative easing but wants to see the Reserve Bank's mandate broadened so it does not make decisions based solely on price levels.

- © Fairfax NZ News

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