I think, it is, when it comes to Test cricket.
For 3 reasons -
1. That AUS side in mid 80s looked so poor because they were up against some of the best teams ever. I think, ENG was decent, while IND had a tremendous batting & a great all-rounder. But, apart from that NZ had easily their best team ever, PAK was a great side & not to mention Lloyd's WI. Still, that side had some telling success like beating WI twice at SCG (they out did them in Spin friendly condition!!!!!), tied a Test in IND (& drew the Series 0-0), Managed to save 2 Tests (or 3?) against WI, in WI. They almost won a Test at Lahore (to tie the series 1-1), deprived by bad light. That AUS side of Chappells, Lillee, Marsh & few others was so good in between 1970 to 1983, that once those stalwarts retired, expectation was higher for a new team - probably performance wasn't that bad.
2. There was ray of hope. After PAK series (Jan '84), Lillee, Marsh, Chappell & Yellop retired while few senior players went to rebel tour. Then there was the melt down of Kim Hughes, which led to a start from scratch under Border. That young AUS side did struggle, but there were some outstanding U25 players in that new team & in their FC system - Steve (later Mark), Deano, Boon, Marsh, Valleta, Phillips, Taylor, Ritchie, McDermott, Reid, Hughes, Lawson, Whitney .....above all, they had a tremendous character at his prime - AR Border. Bobby Simpson was given the task to fix that young team with Border - the core was there, they just kept them focused. Also, that young team had character on not to throw the towel - for example, Deano batted for 11 hours in scorching sun at Chennai, vomiting blood (he lost 11 lbs), Boon batted for 10 hours against WI throwing everything to his body, McDermott running for 60 overs, once one of his bowling partner got injured. I am a bit disappointed with the attitude of current lot - stubbornness & die hard fight is the core of AUS cricket, this teams seriously lag in character.
3. This is hypothetical - temporary slump is not new to AUS cricket, in fact any team. Once, a great team is formed, it's always followed by a generation gap. But, AUS had the best domestic system, passion & pride for the game, a legacy that brought the best talents to Cricket & the wound was healed in quick time. I am not sure, if AUS will be able to make up this time so quickly & strongly, if ever. Their domestic system has shifted from it's core, which is the base of grooming quality cricket - FC system & diversity of playing surface/condition.