Q: how can i set up a new phone if it says itunes is not current but it is

What version of iTunes are you running on your computer? Mac or Windows?

The current version of iTunes is 12.3.2

What computer are you using and what is the version of iTunes on it?

Latest is 12.3.2

Are the old phone and the new phone using the same iOS version? You may need to update the iOS first.

From your description, it appears that you are NOT trying to "sync", what you may be trying to do is to restore a backup from your old phone to your new one. If so take a look at these instructions.

Transfer content from an iPhone, iPad, or iPod touch to a new device - Apple Support