World Vision Australia chief Tim Costello said Australia would be "exporting death" and "profiting from bloodshed" if it followed through on Defence Industry Minister Christopher Pyne's plan to see the nation become a major arms exporter.
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PM's new terror plan
Surrounded by heavily armed commandos, the Prime Minister has revealed new measures to respond to terror threats in Australia.
Speaking to Fairfax Media, Mr Pyne said he wanted to see Australia not only build but design military assets, such as warships, on par with other players and allies such as Britain, France and Germany to help bolster the nation's influence and reinforce relations.
But Mr Costello strongly criticised the plan, which he said carried terrible consequences.
"This is a government that has cut humanitarian aid, which saves lives, to the lowest level in our history, and it is now seriously discussing the merits of becoming a major weapons manufacturer and exporter," he said.
"The government says this is an export and investment opportunity – but we would be exporting death and profiting from bloodshed.
"Is that what we want Australia to be known for?"
Mr Costello said it was naive to imagine Australia could control whose hands the weapons ended up in, once they were sold.
"The war in Syria, which is now in its seventh year, could not have lasted for more than a year without armaments profiteering," he said.
"…There is only one purpose in making a weapon and that is to kill someone with it. Do we really want that to be what people think of when they see the brand 'made in Australia'?"
Mr Pyne admits it would be a long-term goal, which would begin with utilising the $200 billion in funds set aside for defence acquisitions over the next nine years, to build a new industry that would "eventually design, build and export ships, vehicles, missiles, whatever it might be that we have an expertise in".
A spokeswoman for his office said expanding the Australian defence industry, would create "more high-tech manufacturing jobs and provide increased opportunities for Australian businesses".
"All exports are assessed under Australia's defence export control provisions, which reflect Australia's international obligations as a committed member of international Arms Control regimes and as a signatory to the Arms Trade Treaty. All exports are assessed against five criteria: international obligations, national security, human rights, regional security and foreign policy," she said.