Former prime minister Malcolm Fraser has slammed the Federal Government's refugee swap deal with Malaysia in a scathing critique.

At an annual speech for the Australian Refugee Association in Adelaide last night, Mr Fraser said Australia should not be involved in the trading of people.

He also criticised both major parties for playing politics with asylum seekers and for chasing what he calls "redneck votes".

In a speech titled From White Australia to Today, he reflected on Australia's achievements as a multicultural society.

"Australia could not have developed as she has without the work, the effort, the ingenuity of Australians who have come here in the post-war years to make a new home and to adopt a new country," he said.

But he also lamented the current debate about asylum seekers.

"This is a demeaning debate, it's a miserable one," he said.

"It also shows that the politicians who participated in this debate have contempt for all of us, to the majority of the Australian people.

"They believe that despite all the evidence to the contrary, that if they appeal to the fearful and mean sides of our nature, they will win support."

And that includes the Government's plan to send 800 new arrivals to Malaysia in exchange for 4,000 registered refugees over four years.

"The whole idea of swapping asylum seekers including children in this way, as if they were commodities, is odious.

"It is trading in people and bears no relationship whatsoever to the cooperation that was achieved during the exodus from Indo-China does not represent an appropriate or a just solution."

Malaysia is not a signatory to the United Nations convention on refugees and Mr Fraser is worried about how children will be treated.

He has also questioned the political rhetoric on people smugglers.

"It's important to understand why people get on boats," he said.

"There's a false impression I think that people smugglers canvass around saying that we have a boat that's going to Australia, buy a ticket, you can claim asylum, as though people smugglers can rely on asylum seekers to fill their boats.

"The fact demonstrates otherwise. The fact that overwhelmingly people who come by boat are genuine refugees and are proven to be so by judgments made by Australian authorities or by UNHCR demonstrates that they are people fleeing terror, fleeing a tyrannical government, political persecution and oppression."

Mr Fraser was mute on Opposition Leader Tony Abbott's policy of reopening the detention centre on Nauru.

But he did not hold back about the Liberal Party, of which he is no longer a member.

"Now, because the Liberal Party has pursued the Labor Government so vigorously on this issue, the Government appears to have forgotten the common humanity which we should all share and its rhetoric and its policies now argue that the Government is just as tough as the Opposition," he said.

"Does Labor realise that it can never outdo the Coalition on inhumanity to asylum seekers?"

It is a climate of fear he traces back to the Howard government and its handling of the Tampa in 2001.

"But with the balance in the Labor Party at the time, the party decided that the Liberals had ripped enough redneck votes out of the Labor Party, and they weren't going to let them rip anymore," he said.

"Now that's not an assumption from looking at the outside. Those words were used in a conversation I had with one of Labor's most senior people at the time."

Mr Fraser says Australia should be involved in a greater international effort to help resolve problems in other countries.

He also wants a humanitarian and bipartisan approach to the asylum seeker issue.

It is a sentiment that won the former prime minister a standing ovation.