If red imported fire ants - an invasive species - are not contained, a big spike in stings will cause an extra 623,000 medical visits a year, the Australia Institute report suggested.
More than 30 humans would die via anaphylaxis each year, while the report also found thousands of pets would die.
Australia Institute research director Rod Campbell pointed the finger at the nation's various governments for not adequately funding eradication measures.
"If a murderer said they planned to kill 30 random Australians each year, the response would be enormous ... that's essentially what fire ants are doing - yet the response is minimal," he said.
"Our research shows that investing in fire ant eradication is one of the best economic policies a government could adopt, as well as being good environmental and security policy."
Australia's fire ants response plan spends about $148 million a year on management and eradication activities.
But the Australia Institute's study pointed out a separate 2021 report suggested eradicating the invasive species would cost between $200 million and $300 million a year for a decade.
Not spending that could have dire economic consequences, along with killing both humans and pets, the report found.
"If allowed to spread across Australia, red imported fire ants could cost Australian households $1.08 billion in medical, veterinary and management costs every year," the report read.
Fire ants could result in more than 2.3 million additional vet visits a year, an overall cost of $228 million.
Allowing for one in every thousand visits to result in a death, the study found 2300 would die each year.
Nearly one in two Australian households have a dog, and about a third have a cat.
"Prime Minister Albanese, a renowned animal lover, could save Australian households $1 billion a year and a lot of heartache by properly funding and prioritising fire ant eradication," Mr Campbell said.
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