A Chinese navy ship injured Australian naval divers with sonar pulses, and Prime Minister Anthony Albanese has faced criticism for not making the attack public until after he left a summit where he met the Chinese president.
Mr Albanese met President Xi Jinping on the sidelines of APEC in San Francisco, with the government keeping the incident from the public for some four days until the day after he left.
Home Affairs Minister Clare O'Neil said the attack "put at risk Australians who put on a uniform every day to fight for our country", adding those views had been made known to China.
Former prime minister turned US ambassador Kevin Rudd defended Mr Albanese's conduct, saying the nature of any conservation between the prime minister and world leaders was confidential.
"We do not comment on the detail, (it's) long-standing practice governments - Liberal, Labor and Callithumpian," he told ABC radio on Monday.
The incident was handled through the appropriate channels, Clare O'Neil said.
Mr Rudd said the incident would be a test of the stabilising relationship and branded commentary on whether the issue was raised "a complete distraction from the central question, which is China, through its actions … engaged in unsafe practices."
Ms O'Neil said the government would not play politics with the countries' complex relationship.
"This is one of the largest countries in the world, we are going to have to find a way to coexist in our region over the coming decades," she told reporters in Canberra.
"This is a serious national security issue and an important relationship for our country. We handle it through the appropriate channels and that's what's occurred."
The opposition and crossbenchers have been calling for the prime minister to come clean about whether he raised the incident with the Chinese president.
Independent senator Jacqui Lambie said the issue should have been raised and called for the government to be upfront and answer questions.
"You can't sit there and pretend you're going to be nice on trade while this is going on with your own navy people that could have bought more harm to them," she told Sky News.
"This is just ridiculous. What happened to the friendship and the trust that we're building and all the rest?"
Opposition defence spokesman Andrew Hastie said if the prime minister knew about the incident and deliberately withheld the information, it was "outrageous and unacceptable".
He said Mr Albanese needed to come clean about whether he raised the incident with his counterpart as the two nations try to repair their frosty relationship.
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