Ange Postecoglou believes Australia is going backwards in player development and needs drastic investment and restructure to avoid disaster.
Postecoglou spent four years in charge of the Socceroos, won the 2015 Asian Cup and led them to qualification for the 2018 World Cup.
The 52-year-old, who also had seven years coaching the Joeys and Young Socceroos, feels Australia needs a long-term plan and broader vision when it comes to developing young talent.
"In terms of development I think we’re going backwards to be honest,” Postecoglou told The Guardian.
"Unfortunately, from my days as national coach we’re going backwards – in terms of we don’t see it as an investment, we see it as an expense.
"We just have too short-term thinking, there just aren’t enough people with a broader vision as to how we can actually we can make Australia a force in world football.
"At the moment, it’s still about this World Cup or the next tournament, and eventually that will catch up with us. I think we’re going to find it really hard to compete in Asia. We’re already finding it difficult at youth and under age levels.
"The challenge even in the future to qualify for senior World Cups will become more difficult because more and more Asian countries put money into their youth, and we don’t. If anything, we’re going the other way."
The Olyroos have not qualified for an Olympics since 2008 while the Young Socceroos and Joeys have failed to reach youth World Cups in recent times.
Postecoglou believes if Australia doesn't put money into grassroots football then the professional game and national team will eventually suffer.
"I think that needs a major rethink and a major restructure," he said.
"If you don’t invest in grassroots and if you don’t invest in youth football, then it’s inevitable that you’ll pay the price somewhere down the track."