Australian Prime Minister Kevin Rudd is in Papua New Guinea for talks, as a new poll put his Labor party neck and neck with the opposition.
Mr Rudd and his counterpart Peter O'Neill were expected to discuss trade and asylum issues.
Mr Rudd has also pledged to provide 50 police to help Papua New Guinea's policing efforts.
Labor's improved poll figures came as the party said it planned to scrap Australia's controversial carbon tax.
The tax had triggered fierce opposition when it was introduced last year, as critics said businesses would be hit hard and consumers would end up with higher fuel bills.
On Sunday, Treasurer Chris Bowen said the tax would be revoked and an emissions trading scheme originally planned for 2015 brought forward to 2014 instead.
This would lower the amount businesses had to pay for carbon emissions, enabling the current fixed carbon price of A$24.15 ($22; £14) per tonne to be removed and replaced with a lower floating price of between A$6 ($5; £4) and A$10 ($9; £6) per tonne from July 2014.
While the move would cost the government "several billion dollars" in lost revenue, it would be financed "in a fiscally responsible way", Mr Bowen said.
However, opposition leader Tony Abbott said: "Mr Rudd can change the name but whether it is fixed or floating, it is still a carbon tax."
Mr Rudd has yet to confirm a date for Australia's national elections, which must be held by November.
"[There are] a lot of challenges ahead, we're working on them one by one," he said in PNG.
Labor has experienced a poll bounce since Mr Rudd ousted his predecessor, Julia Gillard, last month in a party leadership challenge.
Monday's Fairfax/Nielson poll suggested that the Labor Party and the opposition Coalition were tied at 50-50 on a two-party-preferred basis, where preferences for other candidates are distributed to the two major political sides.
When asked who they would prefer as prime minister, 55% of respondents opted for Mr Rudd, compared to 41% for opposition leader Tony Abbott.
Mr Rudd is accompanied on his Papua New Guinea visit by Trade Minister Richard Marles and Immigration Minister Tony Burke.
"Papua New Guinea has a critical role within a regional approach [on asylum] and has provided assistance to Australian governments for some years through facilities on Manus Island," Mr Burke said.
Australia has an offshore processing centre on PNG's Manus Island, which was criticised by the UN last week.
Australia decided to re-establish offshore processing camps in August, after ending the policy - known as the Pacific Solution - in 2008.
Under the policy, people arriving by boat to seek asylum in Australia are sent to camps in Nauru and PNG while their claims are assessed.
The government says offshore processing is aimed at deterring people from making the dangerous journey across the sea to Australia.
Several boats have sunk or had to be rescued as they attempted to sail to Australian territory.
However, critics say the policy is inhumane and provides inadequate protection for the human and legal rights of asylum seekers held offshore.
On Friday, a boat carrying more than 90 asylum seekers sank off Christmas Island, which is located between Australia and Indonesia. A baby boy drowned and eight people remain missing.