Mr Fraser said the larger question before Australians right now is what the country's future will be. The former prime minister's recent book, Dangerous Allies, which won this year's John Button literary prize for political commentary, argues that Australia's close relationship with the United States could lead to conflict with China. "How many politicians talk about that in a realistic sense? There's no direct threat to Australia. We do not need to be a frightened nation," Mr Fraser told AM. "You know, if America goes to war with China because Japan does something stupid – which is the most likely scenario – Australia, at the moment, on current policy settings, does not have the capacity to say 'No'," he said. But Mr Fraser said the situation was no different under the Rudd or Gillard governments. "You can't pick much difference between the political parties," he said.

Julie Bishop said, 'We're going to stand up to China'. What are we standing up to China about? We don't have an argument with China unless they create one.