Prime Minister Jacinda Ardern and her Australian counterpart Malcolm Turnbull have sat down for the start of formal talks, with both emphasising the two countries' shared values.
Sitting down for an hour of talks after Ardern was welcomed to Admiralty House, Turnbull said the pair had already discussed a number of issues over dinner at his Piper Point mansion, quipping they had left enough to fill out the rest of the day.
"The friendship, the partnership, the alliance between our two countries is so enduring and it gets closer all the time," Turnbull said.
He said the two countries had much to discuss, including joint military efforts in Iraq and Afghanistan as well as their work in the Pacific.
"Fundamentally, our alliance...is built on shared values, that's the most important thing.
"Shared values, democracy, the rule of law, freedom, the enterprise of Kiwis and Australians working together."
In response, Ardern said the two countries' shared values were the "foundation" for their talks, and she believed they had a chance to strengthen their economic ties even further.
She said it spoke volumes that this was her third trip to Australia in her first four months as Prime Minister - "It feels so much longer," she joked.
Earlier, Ardern was formally welcomed to Australia in a ceremony at the Australian Governor-General's official residence in Sydney.
Ardern and her partner Clarke Gayford were greeted at Admiralty House by Governor-General Sir Peter Cosgrove and Turnbull.
A 19-gun salute announced Ardern's arrival, before a military band played New Zealand's national anthem.
The New Zealand delegation were greeted by a guard of honour of Australian Army, Air Force and Navy personnel, inspected by Ardern on a large, sloping lawn opening out to a pristine view of the Sydney Opera House.