Former PM Paul Keating lashes the 'ignominy' of the AUKUS deal and why Labor's gong along with it

"Both the parties have lost their way in respect of Australian foreign policy. This is the fact of the matter," the former Labor prime minister told the National Press Club on Wednesday.

"I am here to say that the parties in respect of their current policies are fundamentally not up to it. Both of them. That is the Coalition and the Labor party."

And the new Anglo trilateral AUKUS alliance with the eight subs due in about 20 years? The impact on a "pre-eminent" nation such as China would be, according to him, like throwing, "a handful of toothpicks at a mountain."

"They are in the adolescent phase of their diplomacy. They're on testosterone running everywhere, you know, but, but we have to deal with them because their power will be so profoundly big in this part of the world."

Now 26 years after his last press club appearance, the former Labor leader is back to lay out his frustrations after the spectacular diplomatic rupture and provocation caused by dumping of the $90 billion French subs deal in favour of the new Anglo trilateral AUKUS alliance.

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We are, according to him, in a "hopeless environment" and in a sort of "debate trickery." Mr Keating says Australia is now very much at odds with its geography and it has "lost its way."

"No, we're not happy to be in the region, we're still trying to find our security from Asia rather than in Asia," he said.

"I mean the ignominy of it, the appalling ignominy of it speaks volumes about our incapacity to absorb the region, enjoy the region, be part of the region and to celebrate the fact that we've been here."

AUKUS was necessitated, according to the Prime Minister Scott Morrison, by the "changing strategic environment" in the region. This, of course, is unsubtle code for China.

But Mr Keating believes this is nonsense and stresses that Taiwan is not a fight for Australia as it is "not a vital Australian interest."

"The Australian people are entitled to know that China is not going to try and rip up the system. China's not going to be attacking people. It doesn't take contiguous states," he said

"You know, we can have a civil relationship with them even though we disagree on the range of other issues."

"China's simply too big and too central to be ostracised."

Mr Keating is savage of both sides of politics, but has outlined particular disappointment for what he sees as Labor's lockstep position on foreign policy under opposition spokeswoman Penny Wong.

He says the ALP has a proud history of engagement that Asia and including China, but "you never hear about it. He is heavily critical of the opposition's backing the government's AUKUS plan.

"Labor gets a briefing one night and by 11 o'clock the next morning, they're in the car," he said.

"They've taken a position, certainly Penny Wong's taken a position, there shouldn't be an ounce of daylight between her and and the Liberal Party, that is Julie Bishop and Marise Payne.

"Now, that way, you end up with a relatively quiet political life. You have no big disputes, because you're glued up onto the government, but you make no national progress."

You don't often hear the Labor side say Paul Keating is wrong. He is the man who delivered the "sweetest victory of all" in 1993 and he is now an elder statesman of Australian politics.

But the opposition and Senator Wong reject his assessment and point to deep, long-standing engagement in Asia.

The Morrison government talks up trade, although it is currently embattled, and insists it taking a more active role in Asia.

Understanding and engaging with Asia is an old riff from Mr Keating that goes back to his time in office. The question is are the politicians and security agencies of today listening to him? Or are his biting assessments just being enjoyed as zingers?

Australia is very close to the next federal election and the Coalition would normal enjoy standing up on its national security credentials. Labor has not been keen to pick any international fights.

But there is more at stake and sensitivity is high.

Underestimating China, to quote Mr Keating, would "make a cat laugh."