Senior federal government minister George Brandis believes Australia's defence industry, like any manufacturing industry, should be looking for export opportunities.
Defence Industry Minister Christopher Pyne told Fairfax media he wants Australia to become a major arms exporter on a par with Britain, France and Germany.
Senator Brandis told Sky News said Australia already exports manufactured goods from the defence sector, such as a component of the joint strike fighter.
"Australia has a very, very strong technical capability in defence industry and there are export opportunities to be sought," he said on Sunday.
Labor's defence spokesman Richard Marles said if Australia wants to have a defence industry, it's got to have an export component.
"You can't have a defence industry solely based on your home defence force, particularly with a country the size of Australia," he told ABC TV.
But he said it needs to be done carefully within an appropriate legal regime to ensure defence material is not used in the wrong way.