"We're a little bit stretched with all the injuries in the four (Australian Super 14) teams," Flatley told the Herald Sun.
"At the moment, Australian rugby has quite a few injuries floating around and we just don't have the depth that New Zealand and South Africa does."
Reds full-back Latham, who injured his knee in a pre-season training accident in January, has earmarked the Wallabies' Bledisloe Cup clash against the All Blacks in Melbourne on June 30 as his comeback match.
And with a fully-fit squad, Flatley believes the game is a good opportunity to build momentum before attempting to win their third World Cup in October.
He said: "They're always special games. For an Australian, the Bledisloe is the pinnacle of the game, barring playing in a big game in the World Cup.
"If we can get our best 22 together and keep fit around Bledisloes and the World Cup, then we've a chance of winning anything."