The Wallabies will offer serious competition to the British and Irish Lions next summer, says Rugby Australia chief executive Phil Waugh.

Australia suffered the heaviest defeat in their 125-year Test history on Saturday when they were swept aside 67-27 by Argentina.

It was their third defeat from four games in this year’s Rugby Championship and follows a miserable pool-stage exit at last year’s Rugby World Cup.

“You can see the progress is there,” Waugh told the Sydney Morning Herald, external when asked about the team’s trajectory before the Lions’ arrival Down Under in June.

“It is not nearly where we need it to be, but if we keep progressing at the speed with which we have moved things in the last six months, then there is plenty of time.”

Waugh believes the headline-grabbing scoreline against the Pumas hid the improvements that have been made during new head coach Joe Schmidt’s six months in charge.

Australia, who defeated Argentina the week before, led 20-3 in Santa Fe before capitulating in the second half.

They were also within two points of world champions South Africa at half-time of their August meeting before losing 30-12.

“It is a team that is, and I hate using the word ‘re-building’, but it is a team that is re-setting, and it takes experiences in big moments to get better,” Waugh added.

“Obviously the enormity of the scoreline in that second half [against Argentina] was disappointing.

“But there is context that is important… we are not the most experienced team in world rugby, and we are building that experience.”

Australia will complete their Rugby Championship campaign with Tests against New Zealand on 21 and 28 September, before taking on England, Wales, Scotland and Ireland in the autumn.

Big-money code-crossing import Joseph Suaalii is set to be among the Australia squad that travels to the northern hemisphere.