Unfortunately a little Victorian fairy tale spun by Albert to save face. The decline he eludes to was caused in large part by the VFL's open check book policy which peeved off the public in all three footy heartland states.
WA and SA because of the talent drain to the east and the Vics because of the uneven playing field, IE some teams had all the star players while the others had to struggle on by developing the home grown. Easy to fix the half forward line by buying a "Steve Kernahan" or a half back "Robert Klomp" from SA. (I'd mention some notable WA stars here, but not sure of their spelling.) Anyway there were heaps from both states and that found their way onto VFL club lists.
The common belief that the WAFL and SANFL were weaker than the VFL is a Victorian pedaled furphy.
Yes this was driving the VFL broke as the less affluent clubs tried desperately to keep up. The expanded VFL and draft was designed to reign in this reckless and uncontrolled spending as it was destroying the VFL competition from within. State of Origin was the ultimate price paid, because the Vics needed to have the VFL to be seen as the undisputed premier competition in the land and that format, (State of Origin) was debunking that myth and also bank rolling the impudent defiance of the minnow states, in their, (VFL's) desire to attract as many of the best players at the best price as possible.
That's why Adelaide got into the AFL ahead of the Port......giving up the SANFL retention fund, which Port had no control over, and was paramount to achieving that overall aim.
I never seem to remember much of an outcry in Melbourne about the 'open cheque book' policy, but being a Carlton supporter I was naturally in favour of it.
Having seen footage of WAFL and SANFL from that era at the time, I was one in the vast minority that thought the other two leagues were of a similar standard - SoO proved this and parochialism blinded many Victorians.
I thought that the drafts were brought in to equalise the competition, especially when Brisbane joined the VFL, more so than rein in spending (that is what the salary cap was brought in for).