"It's not attitude. It's maybe that little bit of doubt creeps in when something goes against you early.
"We're not up to the standard we need to be at defensively."
Cheika believes his attacking weapons - in particular fullback Israel Folau, midfielder Kurtley Beale and wing Henry Speight - are good enough to score points against any team.
"With the team we've got the points should be coming," he said. "We've got an attacking type of team so we should be scoring points but you've got to have both sides of the game.
"We know what we need to do to rectify that this week - both mentally and on the training paddock."
Wallabies skipper Michael Hooper said: "It was fast paced like we expected. That first 10 minutes when we were attacking - we had some heat on them, but mistakes and our defence wasn't up to scratch. There was a bit of an unravelling there and we were able to get back in it with some really good fight.
"We started to click and we forced them into some errors. We were able to maintain our momentum which is really pleasing which shows we can put any team under a lot of pressure."
At 40-6 down at halftime in front of a crowd of 54,000 at the 80,000-capacity stadium, the Wallabies were staring down the barrel of a humiliation, but their second-half response, including four unanswered tries, will give them hope at least before the return match under the roof in Dunedin.
"I know we'll improve and we've got to do some quick improving before the next game to keep the series alive," Cheika said.
"I don't think there's going to be a lot of changes. The change has to come from us believing we can make the hits... making sure we're coming up on defence and backing ourselves."