Papua New Guinea's Prime Minister Peter O'Neill says he agrees with the Australian Government's decision to abolish Australia's aid agency, AusAID.
At the opening of the Australia PNG Business Forum in Cairns, Mr O'Neill praised the Australian government's new aid agenda in the region.
He says the decision to cut AusAID is one of the most important changes to take place in PNG's increasingly strong relationship with Australia.
He says the move means Australia's development assistance can better align with PNG priorities.
At the forum, Australia's foreign minister, Julie Bishop, said Australian aid was undergoing a paradigm shift, including allowing up to 50 per cent of aid to PNG to go to agreed infrastructure projects.