Prime Minister Anthony Albanese is set to hold talks with his New Zealand counterpart Jacinda Ardern after she called for Australia and NZ to pull in the same direction on climate change funding in the Pacific.

Mr Albanese will host Ms Ardern in Sydney on Friday for bilateral talks on economic ties, security in the region, Indigenous cooperation and climate change.

Cutting visa red tape, lifting green technology investment and recognising Aboriginal and Torres Strait Islanders will also be discussed.

Both leaders on Thursday night flagged finding ways to improve the movement of workers between their two countries, with Ms Ardern suggesting including NZ in Australia’s working holiday visa program.

“[Overseas workers] often see Australia and New Zealand as a package,” Ms Ardern said.

Both leaders acknowledged they would always be fighting for the same highly skilled workforce.

“It’s important that we don’t get in a situation where we’re competing off each other, but benefiting off each other as well,” Mr Albanese said.

Ms Ardern also wants Australia to use its market “clout” to help NZ secure more electric vehicles.

Mr Albanese said the two countries had always “punched above our weight” on innovation but sometimes failed to commercialise – something the two leaders would discuss.

Friday’s meeting follows a speech by Ms Ardern on Thursday calling for Australia and NZ to pull in the same direction on climate change funding for the Pacific region.

“Climate change must be a foreign policy priority,” Ms Ardern told the Lowy Institute in Sydney.

Well-founded concerns over the militarisation of the Pacific should be matched with a focus on climate change.

“All of this needs to happen because, ultimately, this is our home,” Ms Ardern said.

“And that makes you our cousins.

“But more importantly, over many years, it has made you our friend.”

The leaders are also expected to discuss Australia’s migration settings, which currently see hundreds of people deported to NZ every year.

Ms Ardern has previously said that many of those deported using Section 501 of the Migration Act have little or no connection to NZ, and she hopes to see it changed.

Mr Albanese said he was delighted to welcome Ms Ardern back to Australia for the second round of bilateral talks between the pair since Labor won the federal election in May.

Ms Ardern on Thursday met with NSW Premier Dominic Perrottet and offered her nation’s sympathy for the severe flooding affecting the state.

The pair discussed flood recovery and adaptation, before formal private talks at Parliament House.

Ms Ardern earlier this week spent two days in Melbourne, where she held talks with Victorian Premier Daniel Andrews.