Speaking in parliament, Mr O'Neill said he is disappointed with how long it takes Papua New Guineans to get an Australian visa.
He says he is also upset with reports about inconvenient questions being asked by the Australian High Commission during the application process.
"This visa on arrival business for all Australians will be withdrawn by the following year if we don't get a similar arrangement with them," Mr O'Neill said.
"They all can go and apply for a visa in Australia so that they can come.
"We don't want to inconvenience the travelling public, but on principle sometimes these decisions have to be taken."
In May Mr O'Neill told then-prime minister Julia Gillard that easier visa access for his citizens will go a long way in improving relations between PNG and Australia.