Australian Rugby Union chief executive John O'Neill has warned there needed to be significant and radical changes made to the game locally otherwise it ran the risk of falling into a irreversible decline.

O'Neill has returned to good health and work this month after undergoing neck surgery in November.

But he has painted a picture of a relatively unhealthy code in his first media briefing since resuming work on January 14.

He revealed the ARU management team had spent two and a half days discussing the state of the game in Australia.

"The option of doing nothing can't be contemplated and some very significant radical changes have to be undertaken," O'Neill said.

He said the position was not good and revealed the ARU was set to report a loss of $7-8 million in April, despite a grant of $7 million from the International Rugby Board.

He said the ARU's reserves had diminished from $35 million following the 2003 World Cup to around $15 million and there wasn't one Australian province or state that was really financially healthy.

O'Neill said it was hard to find any of the ARU's key performance indicators over the last four years that was heading in the right direction.

"The position is fairly disturbing, the Wallabies over that four year period had a win-loss ratio of 60 per cent compared to the 70-80 per cent they enjoyed in 1998-2003," O'Neill said.

"In the recent World Cup the Wallabies were knocked out in the quarter-finals for the first time since 1995 and our Super rugby teams have only won the title two years out of 12.

"Even worse, the teams that are our heartland of rugby, New South Wales and Queensland have never won a Super rugby championship and were the two bottom teams last year.

"The matches are not providing the entertainment that fans demand."

The ARU chief stressed the need to increase the amount of high level rugby and suggested the Super competition could be expended to one and a half or even two full rounds.

"I think our players are very well paid relatively compared to players around the world and in relative terms they are under utilised," O'Neill said.

The ARU boss acknowledged any changes to the Super tournament could only be made with the approval of South Africa and New Zealand.

"The SANZAR partnership is in very good shape, but their needs and our needs inevitably are subtly different," O'Neill said.

O'Neill defended his High Performance Unit general manager Pat Howard against recent criticism by saying it was "criticism of style rather than substance. Pat has got my absolute confidence".

The straight-talking O'Neill made it clear the Wallabies and the Super tournament were his major concerns and said replacing the scrapped third-tier Australian Rugby Championship was "not a priority".

He wanted the Wallabies to aspire to a win-loss ratio of 75-80 per cent, which he believed would bring major trophies back to Australia.

He believed the experimental law variations to be used in the Super tournament would indisputably improve the game as a spectacle.

Regarding the off-field controversies which have swirled around the Western Force in recent times, O'Neill was adamant a review of the Perth based franchise's behaviour had been completed.

"I think the Western Force's backyard has been tidied up and we're quite satisfied with the answers we received," he said.

Brought to you by AAP © 2024 AAP