The Australian-American War was a fictional war fought between the United States of America and Australia, mentioned in Grand Theft Auto III, Grand Theft Auto: Vice City, Grand Theft Auto: San Andreas and Grand Theft Auto IV.
The war is first mentioned on Lazlow's radio show Chatterbox FM in GTA III when a veteran of the war, Col. James P., calls in to talk about how no one cares about the Australian-American War. Lazlow then goes on to mention that he's never heard of it. The vet talks about how the Australians equipped boomerangs and kangaroos with explosives.
Little in detail is known about the war. It is unknown who won the war, the Australians or Americans, or even if the war was actually fought, because of the possibility that it was made up in the caller's head. It is also unknown when the war took place, if it took place. If it did indeed take place, it's improbable that the war happened before the late 1950s, because the man calling called himself "Colonel James P., United States Marine Corps. Second Batalion", without adding "retired" to the end, and it's unlikely that an active member of the military in 2001 would've fought in the early 1950s or before. Also, the caller makes a reference to the fact that when he got home, everyone was watching TV instead of giving him a "hero's welcome". Television began gaining popularity as a norm in the middle-class American household in the late 1950s, and early 1960s.
GTA Vice City
In GTA Vice City, the war is implied to have occurred as far back before 1986, as it was mentioned in a radio commercial for Ammu-Nation. The commercials talks about an anti-aircraft gun "used when we whooped the Australians' ass!". This implies that the United States won the war, but this is not definite, as the US Government played the Korean War and Vietnam War as victories after the wars were finished.
GTA San Andreas
The war is loosely referenced early in GTA San Andreas after the San Andreas Earthquake rocked the state. In a WCTR news brief, Richard Burns said that the unnamed Governor of San Andreas was threatening to bomb Australia because of the earthquake, "...despite scientific evidence that it wasn't their fault."
The radio commercial heard in GTA Vice City can also occasionally be heard inside Ammu-Nation stores in San Andreas.
In GTA IV, the war is mentioned again in radio, confirming that the conflict occurred in both GTA III's and GTA IV's continuities. On WKTT, a conservative radio station, a caller to The Richard Bastion Show says, "This country's going to hell! Ever since we let those damn Australians back into this country, everything has gone to shit! What the hell did we go to war with them for in the first place!?" which could be another reference to unpopular wars like the Vietnam War. The host, Richard Bastion, replies "I'll tell you why, we did it for freedom, and for valuable munitions contracts." similar to the Conservative response to the Vietnam War and other unpopular wars, along with the "secret agenda" for many other unpopular wars.
In real life
In real life, the war never happened, and it seems like it will never happen. Australia and the United States have been allied since World War II, and both are part of ANZUS, a treaty between Australia, New Zealand and the United States to police the Pacific Ocean. Both nations were formerly under British colonial rule, with the United States declaring independence in 1776 and winning it in 1783, with Australia slowly gaining independence, starting in 1901 with a constitution, and finally attaining it 1986 with the Australia Act. Australia assisted the United States in the Iraq War in 2003, and the Afghanistan War in 2001. Australia was, and is, one of the United States' strongest allies, and there has never been a threat of war between them.
Also the isolation of Australia in the southern Pacific, sheer distance from America, no valuable resources worth waging war for, and no strategic advantage against any other nation makes such a war impractical.
Although Australia has never even begun leaning Communist, the war may be a joke on how the United States and other Western Nations invading and declaring war on nations where Communism was gaining popularity (i.e., Korea in the Korean War, North and South Vietnam in the Vietnam War). This is reinforced by the way people speak of the war in GTA IV.
It could also be a joke on how Grand Theft Auto games are received in Australia, as some (although none before GTA III) have been partially censored by the Office of Film and Literature Classification, the Australian game rating board, because of 'unwholesome' content.