"We hope the decision will be reviewed and it's premature to talk about sanctions."
Senator Carr said the Australian government had offered "serious assistance" in the form of 30 Australian workers to run elections and maintain the electoral rolls, and hoped to talk with PNG Prime Minister Peter O'Neill and his ministers about the decision.
He said holding PNG elections would be an object of Australian aid.
Asked if he felt vindicated for previously advocating sanctions, Senator Carr said: "No, I wouldn't say that. I think we've got to give the processes in Papua New Guinea some time to work their way through."
PNG Deputy Prime Minister Belden Namah has criticised Senator Carr's previous backing of sanctions.
But Senator Carr said Australia respected PNG's independence.
"We respect their sovereignty but we've got a commitment to seeing the countries in this region stick by a democratic formula, the old formula that says that people determine their rulers and they do it on a regular basis," he said.
- AAP