Antimicrobial resistance (AMR) is a global public health challenge requiring a global response to which Australia has issued a National Antimicrobial Resistance Strategy. The necessity for continued-development of new effective antimicrobials is required to tackle this immediate health threat is clear, but current market conditions may undervalue antimicrobials. We aimed to estimate the health-economic benefits of reducing AMR levels for drug-resistant gram-negative pathogens in Australia, to inform health policy decision-making. A published and validated-dynamic health economic model was adapted to the Australian setting. Over a 10-year time horizon, the model estimates the clinical and economic outcomes associated with reducing current AMR levels, by up to 95%, of three gram-negative pathogens in three hospital-acquired infections, from the perspective of healthcare payers. A willingness-to-pay threshold of AUD$15,000-$45,000 per quality-adjusted life-year (QALY) gained and a 5% discount rate (for costs and benefits) were applied. Over ten years, reducing AMR for gram-negative pathogens in Australia is associated with up to 10,251 life-years and 8924 QALYs gained, 9041 bed-days saved and 6644 defined-daily doses of antibiotics avoided. The resulting savings are estimated to be $10.5 million in hospitalisation costs, and the monetary benefit at up to $412.1 million. Our results demonstrate the clinical and economic value of reducing AMR impact in Australia. Of note, since our analysis only considered a limited number of pathogens in the hospital setting only and for a limited number of infection types, the benefits of counteracting AMR are likely to extend well beyond the ones demonstrated here. These estimates demonstrate the consequences of failure to combat AMR in the Australian context. The benefits in mortality and health system costs justify consideration of innovative reimbursement schemes to encourage the development and commercialisation of new effective antimicrobials.