Fraser made the comment last night at Melbourne's Monash University, where he was being awarded an honorary doctorate of law.
The honorary degree was awarded to recognize Fraser's contribution to public life, his passion for global human rights and his long-term engagement with South Africa.
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Fraser took the opportunity to hit out at successive federal governments for failing to properly fund universities.
"Governments don't seem to recognise this," Fraser said.
"At the same time as withdrawing funds from universities, they're trying to interfere more in the way universities are run and what universities are doing. In older days I think we did better," he said.
Fraser also took the opportunity to slate immigration policies saying they will discourage students from studying in Australia.
"People overseas know when we behave in inhumane or uncompassionate ways," he said.
"It resonates around the world in a way that does Australia great damage.
"You can easily see how that would flow into the students, if the students have an alternative of going to America or Canada or Britain or whatever."
Fraser turns 80 today, and is best remembered for his involvement in the dismissal of Gough Whitlam's government in 1975 and years later the loss of his trousers in Memphis Tennessee.
