Keating, who was Prime Minister from 1991-96, took aim at the federal government after Prime Minister Anthony Albanese, US President Joe Biden and UK Prime Minister Rishi Sunak on Tuesday announced that under an AUKUS security alliance agreement, Australia would buy US Virginia-class nuclear submarines and then build eight nuclear submarines at a cost of up to $368 billion.

Australian Prime Minister Anthony Albanese with US President Joe Biden and UK PM Rishi Sunak on Tuesday. Photo: AP/Evan Vucci

The deal, resulting from the AUKUS alliance formed in 2021, is viewed as an attempt to contain China in the Indo-Pacific region.

“(It is) the worst decision by an Australian Labor government since the former Labor leader, Billy Hughes, sought to introduce conscription to augment Australian forces in World War I,” Keating told the National Press Club on Wednesday.

“For $360 billion, we’re going to get eight submarines. It must be the worst deal in all history.”

“At the kabuki show in San Diego a day or so ago, there’s three leaders standing there. Only one is paying. Our bloke, Albo. The other two, they’ve got the band playing ‘Happy days are here again.’”

Keating said that Defence officials had “overtaken the foreign policy”.

“As a consequence, we’re not using diplomacy. Running around the Pacific Islands with a lei around your neck handing out money, which is what (Foreign Minister Penny Wong) does, is not foreign policy, it’s a consular task,” he said.

“China is a lonely state. That’s the truth of it. They would fall over themselves having a proper relationship with us. We supply their iron ore which keeps their really industrial base going, and there’s nowhere else but us to get it.”

Keating said the deal would not defend Australia’s interests.

“This is a strange way to be defending Australia: have your submarines sunk on the Chinese continental shelf, chasing Chinese submarines,” he said, adding that the agreement left Australia in “deep doo-doo.

“What will happen is we’ll get sucked into the American control system,” he said.

“Anthony Albanese is running around now every second sentence he talks about … sovereignty. He thinks if he drops the word in to enough sentences in an hour, it will actually happen. Our sovereignty is just being peeled away by all of this.”

“I’m not going to have Australia’s long-term strategic interests compromised by rubbish in the Labor Party … I would have expected (Anthony Albanese) from the left and Penny Wong from the left to have stood up with a position.”

Defence Minister Richard Marles, who visited Adelaide’s Osborne submarine site today to sign an agreement which includes a land swap and university places and training, said “developing this capability for our nation will make our nation more safe.”

Premier Peter Malinauskas and Defence Minister Richard Marles at Osborne, with Deputy Premier Susan Close and Foreign Minister Penny Wong (from left). Photo: Tony Lewis/InDaily

“Developing this capacity for Australia will have us be taken more seriously around the world,” he said.

“We have to take the step of developing the capability to operate a nuclear-powered submarine so that we can hand over a much more self-reliant nation to our children and to our grandchildren.”

Premier Peter Malinauskas said South Australia was ready to do whatever it takes.

“The Commonwealth sees in South Australia the ability to build the most complex machines that have ever been produced in the history of humanity,” he said.

-with AAP