"We are like the West Indies, we got comfortable whacking everyone and lost sight of the grassroots and the importance of bring the next generation through," Benaud told 'The Daily Telegraph'.
"Unfortunately, we got complacent and now it's biting us on the bum," he added.
Once considered invincible, Australia are a pale shadow of their former self and are currently 0-2 down in the ongoing Test series against India.
"The game has gone right off the pace and the cricket administrators should be worried. Cricket in Australia is in trouble.
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"You can have your Argus Review (a sweeping probe of the game conducted after Australia's Ashes loss in 2010-11), but unless someone does something and you get some experienced, knowledgeable cricketers back in the scene, we are going to keep struggling," he said.
Benaud said Australia could take a leaf out of England's book while revamping the system.
"England have got their act together, but we haven't got ours together. County cricket (in England) has now overtaken Sheffield Shield in terms of quality," he pointed out.