The Junior Wallabies narrowly missed the semi-finals at the U20 world championship after a falling 36-33 to a late England penalty goal in Italy.
Referee Jeremy Rozier blew 27 penalties, including one in the 80th minute that allowed England flyhalf Benjamin Coen to send over the match-winning points.
Australia U20 had clawed back from 19 points behind in the second half to level the score at 33-all with five minutes left to play.
The loss means the Australians will compete for the 5th-8th finishing positions in their final two games of the tournament.
England U20 got the scoring started in the 12th minute as scrumhalf Archie McParland found a gap next to the ruck and set up flanker Connor Treacey for the try.
The Australians hit back almost immediately as centre Malakye Enasio broke clear and spun the ball wide for winger Nicholas Conway to touch down in the corner.
Despite then enjoying a period of territorial dominance, Australia U20 failed to convert the field position into points, and England U20 captain Kepueli Tuipulotu struck with two tries before half-time.
The hooker had his first after gathering a fumbled Australian lineout and then powered over beside the posts to help give England U20 a 19-7 lead at the break.
Tuipolotu had his hat-trick four minutes in the second half, scoring once again from close range, after back-to-back penalties against Australia U20.
Australia U20 then suffered a further setback as scrumhalf James Martens received a yellow card for repeated infringements.
Against the run of play, and with Martens on the sideline, Conway snaffled an intercept and raced 90 metres to score his second and make the score 26-14.
Cooper Watters appeared to have closed the gap even further in the 56th minute but the TMO ruled the Australia U20 winger was in touch before grounding the ball.
Instead it was England U20 who re-established their advantage as Jack Bracken strolled over in the 62nd minute to make the score 33-14.
From there, the Australians mounted their comeback effort with three tries in a thrilling ten-minute period.
It started with fullback Sid Harvey swooping on a loose pass to wrong foot the defence and set up Hwi Sharples.
Prop Trevor King then crashed over after some smart footwork from Enasio in the lead-up put the defence on the back foot.
Australia U20 thought they had scored the levelling try with 7 minutes left to play but the TMO intervened to reverse the decision.
Undeterred, they plunged over again two minutes later as Martens, now playing on the wing, finished off a slick movement to the left edge.
Joey Fowler’s attempted conversion slid across the face of the posts so the scores remained level.
After failing to take the restart cleanly, Australia U20 suddenly found themselves defending their own line, and opened the door for Coen to win the game for England U20.
Australia U20 33 (Conway 2, Sharples, King, Martens tries; Fowler 4 cons) def by England U20 36 (Tuipulotu 3, Treacey, Bracken tries; Coen 4 cons, pen)
