Australian assistance to Nauru is not under threat, Foreign Minister Julie Bishop says.
Bishop says she has spoken with President and Foreign Minister of Nauru Baron Waqa and he has given assurances that the rule of law will be upheld.
That follows New Zealand's decision on Thursday to suspend about $NZ1.2 million ($A1.08 million) funding for Nauru's justice sector amid long-running concerns about democratic rights and the rule of law in the Pacific island nation.
Last year, the Nauru government forced the island's then only judge out of office and suspended most of the opposition from parliament indefinitely.
Opposition MPs have also been arrested and one, Roland Kun, has had his passport cancelled.
Bishop says she understands legal processes involving opposition MPs are progressing and judicial processes are being followed.
She says Australia will continue to engage with Nauru until this issue is resolved.
“Australia's development assistance to Nauru, which supports health, education and public sector management, is not under review,” she said in a statement.
Bishop said Australia welcomed New Zealand's intention to continue working with Nauru to reach a point where funding could resume.