Australia Prime Minister Anthony Albanese is being questioned about a private conversation where he joked with the US Deputy Secretary of State about splitting the cost of the Pacific Policing Initiative.

The initiative was announced in Tonga on Wednesday - and last night, a Kiwi journalist caught Albanese and Kurt Campbell jokingly discussing the plan.

Later, Albanese brushed off the exchange and claimed there were no plans for the US to help cover the initiative's costs.

Australian correspondent Oliver Peterson says Albanese later claimed the recording was 'unethical'. 

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