AUSTRALIA'S nearest neighbour has made an unusual request for $1.5 billion in direct budget support.

The request from Papua New Guinea comes just weeks after the Pacific nation approached China to refinance its entire debt, exposing a challenging strategic tension Canberra will now be forced to navigate.

Australia already gives PNG about $600 million a year through development aid, but has rejected previous requests for direct budget support.

Acting Labor Leader Richard Marles said the Morrison government would need to consider the request very carefully.

"That is a very big request that's been made by PNG - it's not something that Australia has done for some time," he told ABC Radio National on Tuesday.