At a press conference today, Gillard responded to questions over the recent comments made by Foreign Minister Bob Carr, who last week threatened sanctions against PNG if its government delayed the election.
"Senator Carr has made it clear that some of his comments were taken out of context," she said according to the ABC.
"We have a partnership with Papua New Guinea, we are supportive of its move towards elections in the normal time cycle."
Sir Arnold Amet - who will be attorney general if a Somare government is ever restored to power in PNG - welcomed Carr's comments last week.
He said it was unfortunate Gillard embraced the O'Neill-Namah government in PNG which put Australia in an awkward position as PNG's political crisis unfolded.
"I thus commend Mr Carr's courage in breaking the silence and speaking out on the importance of PNG fulfilling its democratic obligations to its people by ensuring that free and fair elections go ahead as scheduled," he said.
"Similarly, it is important for Australia to support PNG in upholding the integrity and independence of our judiciary."
Amet also took the opportunity to suggest that Deputy Prime Minister Belden Namah - not Prime Minister Peter O'Neil - is running PNG's government.
"We are not even sure if Mr O'Neill is in charge as he has not made a statement regarding the revelation last week of his deputy, Mr Belden Namah's alleged scandalous conduct at a Sydney casino," Amet said.
"Therefore consistent with the actions of the regime, we cannot rule out the possibility that an attempt may be made to defer elections by sidestepping the rule of law and the constitution."
A variety of cases over the legitimacy of the O'Neill-Namah government remain before the Supreme Court.
Recently, the police charged Chief Justice Sir Salamo Injia and National Court Registrar Ian Augerea with attempting to pervert the course of justice over matters relating to a late judge's estate.
On December 12, the Injia-led court found Sir Michael Somare was the rightful prime minister but Peter O'Neill remains the effective PM due to overwhelming numbers in Parliament and the various laws it passed to maintain this new government.
The comments from Carr followed Namah's public statements that he wanted to delay the looming PNG election by 12 months to introduce a biometric voting system.