Two final-quarter goals to Argentina saw them crush the homecoming of local stars Eddie Ockenden, Josh Beltz and Jack Welch, beating the Kookaburras 4-2 in a penalty shootout in Hobart.
The Kookaburras had complete control of the first half, with newly inked captain Jeremy Hayward slamming home two penalty corner goals with aplomb inside eight minutes.
After emerging from the main break with intent, Hayward was denied his hat-trick in the 34th minute before Australia found themselves on the back foot.
Argentina fired a warning on Kookaburras goalkeeper Johan Durst's goal in the 42nd minute when Maiso Casella struck the crossbar with a venomous penalty corner flick.
The visiting skipper then brought his side back into the contest with an unstoppable setpiece rebound in the 49th minute.
Durst was under siege and made back-to-back important saves to protect the Kookaburras advantage, only to see Tobias Martins equalise in the 54th minute.
Australia responded to the challenge late on, forcing a late penalty corner effort to Hayward that was well negotiated and Lachlan Sharp saw his back post effort slide wide of the far post at the death.
In the shootout, it was the world No.7 who claimed the bonus point after early failed attempts from Blake Govers and Jake Harvie.
Craig Marais and Tom Craig were both able to convert on their tomahawk side, bookending a fine save from Durst, before Augustin Bugallo secured a 4-2 shootout victory for Argentina.
The Kookaburras return to action on Wednesday (1900 AEST) against Spain, whom, they edged out 4-3 at the recent World Cup.
