The comments follow a historic meeting between Australia's Foreign Minister Julie Bishop and Fiji's interim Prime Minister Frank Bainimarama in the capital Suva.
It's the highest level ministerial meeting between the Australian and Fijian governments since 2008.
Ms Bishop says the meeting had been productive.
"I had a very productive and constructive meeting with Prime Minister Bainimarama," she said.
"The conversations and observations I've had with Australians about Fiji and Fijians about Australia is that they want us to remain close."
In a meeting that lasted over an hour a wide range of issues was discussed, including the lifting of travel bans against Fijian officials.
Ms Bishop says the policy has already been relaxed, with 56 visas granted to Fijian officials since the Abbott Government came to power.
As part of her two-day visit to Fiji, Ms Bishop has also visited with union leaders, civil groups and members of political parties.
Fiji's Labor Party leader told a meeting of the Pacific Islands Forum (PIF) delegation, attended by Bishop, that caution needed to be applied to any resumption of relations with Fiji ahead of national elections this year.
"We don't have a level playing field. The prime minister's going around at public expense campaigning throughout the country. He has not yet registered a political party but he's carrying on political activities," said Mahendra Chaudhry.
The elections - to be held before October - would be the first in the country since 2006.
The chair of the Pacific Islands Forum ministerial contact group, New Zealand Foreign Minister Murray McCully, said Fiji was making progress towards democracy.
Mr McCully said the delegation will recommend to PIF leaders that Fiji be invited to participate in regional trade talks, known as PACER Plus, as well as meetings at trade ministerial level.
But the delegation also "emphasised the importance of ongoing improvements to media freedom, freedom of speech, association and assembly".
McCully said it would be in Fiji's interest to have the election judged on its openness and fairness.
"Ministers encouraged Fiji to welcome full international observation of the election to leave no doubt as to its legitimacy," he said.
Bainimarama has announced he plans to run in the September polls and will stand down as military leader at the end of this month so he is eligible to be a candidate.
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