An Aboriginal ex-AFL player has labelled Australia racist after weighing in on a new documentary that explores the appalling rates of Indigenous incarceration.

Tony Armstrong, who played 35 games across six seasons for three clubs, argued that Australians needed to accept they were living in a racist country after watching unsettling footage from 'Incarceration Nation'.

The documentary takes a deep dive into the imprisonment rates across the country with Aboriginal men making up 29 per cent of the male prison population and Aboriginal women making up 34 per cent of female inmates.  

'This country still can't accept it's a racist country,' Armstrong said on Channel 10's The Project on Thursday. 

'You still can't accept it's built off the back of slavery, it's built off the back of dispossession, it's built off the back of rape and pillage of Indigenous people.'