While historically Australia has been a major exporter of food commodities and is generally considered to be “food secure”, our inter-disciplinary modelling of Australia’s food system and contemporary diet demonstrates that Australia is likely to become a net importer of key nutritious foods such as nuts and dairy if it continues along its current policy path. Furthermore, this occurs in the context of accelerating international debt, complete dependence on imported oil and declines in Gross Domestic Product per capita. Coupled with no reduction in greenhouse gas emissions, and increasing water deficits around many capital cities, these factors indicate increasing threats to Australia’s food security. These strategic challenges arise from past and current policy choices and trends, including continued consumption of an unhealthy diet. Their effects are modelled for the coming decades using an innovative scenario simulation based on comprehensive accounts of physical processes in Australia’s economy simulated in the Australian Stocks and Flows Framework. Our analysis further employed health and economic cost modelling based on burden of disease data, conservatively demonstrating that productivity and health costs of unhealthy diets would be at least three billion Australian dollars for the 2025 Australian population if we were to continue on this trajectory.