Prime Minister Julia Gillard has paid tribute to Australia and Papua New Guinea's abiding friendship, as she highlighted some significant challenges during her first speech on her first official visit to the island nation.
At a state dinner to mark the visit, Ms Gillard told guests Australia will stand with PNG, our closest neighbour, as it tackles a grim health, education and security outlook.
"I know you are committed to progress in these fields and Australia joins you as a partner," Ms Gillard said.
"The PNG government has a far-reaching agenda of reform and we will support and assist you in this vital work.
Advertisement"This is a period of unmatched opportunity for Papua New Guinea. I know how determined this generation of leaders is to translate that opportunity into benefits for the generations to come."
Mr Gillard's host, Prime Minister Peter O'Neill was elected in July last year on a platform of fixing PNG's ailing health and infrastructure, which had stagnated following years of corruption and neglect.
Listing the challenges faced by PNG, Ms Gillard referred to the security of women "who endure such particular horrors."
PNG has one of the highest maternal mortality rates in the world, and some estimates suggest as many as 70 per cent of PNG's women have experienced sexual or domestic violence.
International attention has recently been focused on a series of gruesome murders of women over allegations of "witch craft".
Ms Gillard and Mr O'Neill will on Friday sign a joint declaration to boost co-operation between the two countries.
"This 2013 declaration points the way to a new level of co-operation based on mutual trust, respect and common values," Ms Gillard said.
"We must build relationships that stand the test of time during the pressures and changes that accompany the Asian century."
She said PNG was making progress in the form of the $19 billion Exxon Mobil lead PNG LNG project, which Ms Gillard is due to visit on Friday.
"We see the same signs (of progress) in the 41 billion kina in Australian investment and in your commitment to establish an effective sovereign wealth fund based on international best practice," she said.
Australia invests in the project through the Export Finance and Insurance Corporation.
"Australia is by far the biggest destination for Papua New Guinea exports and the biggest source of PNG's own imports of goods and services."
Mr O'Neill said Ms Gillard's visit reflected the importance her government attached to the PNG/Australia relationship.
"The relationship remains important and I think relevant," he said, referring to a raft of official visits.
"Let me stress the government-to-government relationship is in good shape.
"We are neighbours and I always believe neighbours should get on well together and sort their differences amicably.
"I want us to agree during your visit that we will recognise a need to reflect the new maturity of our relationship at all levels."
Mr O'Neill urged Ms Gillard to ease visa restrictions for Papua New Guineans visiting Australia.
He said there were a list of about 40 countries who had an easier time getting to Australia.