Prime Minister John Key introduced Australian Prime Minister Julia Gillard to the Glen Taylor School in the Auckland suburb of Glendowie as his "special friend".
The pair were welcomed with a powhiri and hongi from members of the board of trustees.
Mr Key has a close relationship with the school already, as it was where he launched the controversial national standard policy.
Mr Key acknowledged there was some difficulty with the moderation aspects of the policy, saying "it takes time for the system to imbed".
But overall it was going to make a "tremendous" difference.
The pair signed a plaster cast of a young girl who had broken her leg when she tripped at the Parnell pool.
Gillard pays tribute to Kiwi 'mateship'
Earlier today, Ms Gillard paid tribute to the help New Zealanders gave in the recent Queensland floods.
"You brought comfort, you brought mateship and you will never be forgotten," she told over a thousand people at a business lunch in Auckland.
"We too will not forget the 29 men who never came home from the Pike River Mine. They live on in our hearts and our memories. And at a time of hardship and grief, Australia will always be there to help."
The main focus of her speech was the business relationship, saying a strong New Zealand was good for Australia and and strong Australia was good for New Zealand.
"New Zealand entered a recession before the global financial crisis and while still facing many challenges, I note that your economy has started to turn the corner.
"It is crucial that both our economies maintain ambitious post-GFC reform agendas to keep productivity and competitiveness high.
"When you get economic reform right, you fuel the drivers of sustainable longer term economic growth," she said.
She said the closer economic relationship (CER) agreement which came into effect on New Years Day on 1983 was a world leader in trade liberalisation.
The "cross-pollination" that took place between the two countries under it were being constantly replaced.
Both countries were committed to the single economic market agenda "forging greater business co-operation and investment," she said.
It was an example of how two countries continued to "breathe life" into the agreement.
She said she and Prime Minister John Key would be doing all they could to make the Trans Pacific Partnership eight-way trade deal a reality by the time of the next Apec in November.
"Complacency is not an option as we face new challenges in a changing global economic environment.
"The global economic recovery remain fragile, with highly uneven growth across different regions and a number of significant vulnerabilities.
At the top table with Julia Gillard was head of Trans-Tasman Business Circle Sir Don McKinnon, Foreign Affairs Minister Murray McCully, head of Westpac George Frazis and Australian High Commissioner Paul O'Sullivan.
Arrival in Auckland
Ms Gillard arrived in Auckland on an Australian Air Force modified Boeing 737 VIP aircraft at midday where she was greeted by Prime Minister John Key.
She immediately left the airport for the city for the Trans-Tasman Business Circle lunch.
Tomorrow in Wellington she will call on the Governor General Sir Anand Satyanand before meeting Mr Key and cabinet ministers at Parliament.
She was to address Parliament in the debating chamber but it would not be during a formal session of Parliament after the Green Party objected, saying it would set a precedent.
Mr Key said yesterday she would be the first foreign leader to speak in Parliament and that was a very significant event which showed the importance of the relationship between New Zealand and Australia.
Ms Gillard said today that was a matter for the New Zealand Parliament and was looking forward to addressing Parliament.
"I'm absolutely honoured to have the opportunity to speak to members of the New Zealand Parliament in their parliamentary chambers."
After an official lunch in the Beehive Banquet Hall Ms Gillard will meet volunteers who went to Australia to help with Queensland flood damage.
She is also to attend an Order of Australia investiture at the Australian High Commission, meet opposition leader Phil Goff and attend a joint wreath-laying ceremony with Mr Key at the National War Memorial.
She is due to fly out of Wellington for Canberra shortly before 4pm tomorrow.
- with NZPA
Gillard a 'special friend', says Key
New Zealand Prime Minister John Key with Australian Prime Minister Julia Gillard at Glen Taylor School in Glendowie, Auckland, today. Photo / NZPA
