To the uninitiated, walking into Beaton’s Firearms in Maddington feels surreal — as if you have stepped out of Perth’s quiet south-eastern suburbs and into America’s underbelly.

The thriving gunsmith began repairing guns for hobby shooters and farmers 40 years ago before it began selling imported rifles in 2000.

A decade ago it began designing, manufacturing, selling and occasionally exporting high-precision sniper rifles and accessories — the type of homegrown product at the centre of the Federal Government’s plan to turn Australia into a top-10 arms exporter within a decade.

Shop co-owner Zaine Beaton is now looking into a number of Government defence-export programs, including grants to help build up small and medium-sized businesses to compete internationally.

He is also booked into a Government-run Defence 101 seminar that is travelling the country to help businesses crack the defence-export industry.

Camera Icon Gunsmith Zaine Beaton and his father, Bill, at Beaton Firearms. Credit: Iain Gillespie

When WestBusiness Insider visits Beaton, one of three gunsmiths at the store and one of 43 with a gun manufacturer’s licence in WA, he is eager to explain the merchandise.

The surprisingly baby-faced gunsmith taps a sleek, black American rifle on the butt.

“With this one, you’d hit a rabbit from more than a kilometre away eight out of 10 times,” he says.

Beaton — who was already a good shot by the time his gunsmith father gave him his first gun at age seven — leaves the shopfront for a few minutes to fetch one of his self-made rifles from the workshop out the back.

He returns with the type of long-range, high-precision rifle that he and the company’s three full- time gunsmiths sometimes export abroad, mostly to dealers in America.

“This one is for extreme long-range shooting from two to two-and-half kilometres away,” he says.

“If you could see it, you’d hit a large kangaroo in the chest every time.

“Or you could stop a vehicle with it — you could shoot a hole in the engine and stop a vehicle.”

Beaton claims his recreational long-distance rifles are far better than a Remington, America’s recently bankrupted gun brand and a long-time supplier to the US military.

And at about $12,000 a piece, he says his sniper rifles are about 30 per cent cheaper than an equivalent-style Remington.

Beaton is currently restricted to recreational products and would not be able to produce fully automatic, military-grade guns without a special licence, which he has not yet sought in the absence of a defence contract.

But given his ability to compete internationally with recreational guns — which he says are just like military guns only 10 years behind — he is confident he could ramp up to compete in niche defence products for specialised army units.

And if gun manufacturing proves too competitive, he believes his specially designed accessories such as muzzle breaks and magazines are already on par with the world’s best and would suit allies priced out of the premier American market.

Beaton acknowledges the ethical concerns involved in building up an industry that deals in death, particularly in light of the volatile world environment and the epidemic of mass shootings in America, but claims it is responsible provided the products are sold only to allies.

“I have no problem with guns when they are used the right way,” he said.

While it remains to be seen whether the gunsmith will ever export his niche products to foreign militaries, the Federal Government has recently poured billions of dollars into programs to assist companies such as Beaton’s Firearms to have a red-hot crack at it.

AUSSIE ARMS RACE

The Federal Government announced plans to turn Australia into a top-10 arms exporter, which includes items such as warships, armoured military vehicles and cyber security programs, earlier this year.

To help achieve this, the Government is pouring about $200 billion into building up Australia’s defence sector over 10 years.

This includes the Federal Government’s $730 million Next Generation Technical Fund for research into emerging technologies and a separate $640 million Defence Innovation Hub which will move these products from the early stages into engineering and development.

As a separately funded initiative, the Government has also set up the $230 million Centre for Defence Industry Capability, which is tasked with driving jobs and growth in the sector.

The centre has this month rolled out a series of nationwide seminars on how businesses can crack the defence-export industry, which will hit Perth in May.

The CDIC’s eagerness to leave no stone unturned in its quest to boost defence exports is evident when its general manager, Andrew Garth, hears of Beaton’s Firearms export aspirations during an interview with WestBusiness Insider, and promptly writes down the company’s name.

“We will reach out to them to see if there is anything we can do to help them,” he said.

“It’s definitely where we can assist, and our primary focus is around defence capability ... I think we really can offer value in that regard.”

The total amount of money being funnelled into the sector is nothing short of mind-boggling.

What we are seeing now is a very unique opportunity where we, as a country, needed to invest in a number of major equipment acquisitions from a defence capability perspective, so a lot of money is about to go into the industry.

On top of the defence budget, there is a $20 million annual defence-export strategy budget and $4.1 million in grants each year, worth up to $250,000 each, to help build the capability of small and medium enterprises to compete internationally in the defence sector.

At the centre of the plan is the $3.8 billion, 10-year finance program through the Export Finance and Insurance Corporation to help local businesses secure defence exports.

Other initiatives include expanded trade shows, targeted trade missions and a concerted effort to break into global supply chains, which will all be co-ordinated by the newly created Australian Export Defence Office.

“What we are seeing now is a very unique opportunity where we, as a country, needed to invest in a number of major equipment acquisitions from a defence capability perspective, so a lot of money is about to go into the industry,” Garth says.

“And so it was an opportunity to align our services to get the capability and the (export) outcomes.

“So we’ve got the capability, we are making the investment. Let’s see if we can now get the export returns from that to ensure that our industry is able to grow and become sustainable in the long term.”

Garth believes defence may prove a lifeline for the resources sector, with oil and gas companies already showing interest in turning their skills to the industry following a downturn in resources.

“Those that have been and are providing high-quality services in the oil and gas sector are saying, let’s look at adding a second string to our bow.

“Once we start to think about it and work with the businesses, we can find the overlap (with the defence sector),” he said.

MANUFACTURING FIREPOWER

But why is there a sudden push to send Australian guns, warships, cyber-security systems and other arms abroad? And is it an elixir for a struggling manufacturing sector?

Prime Minister Malcolm Turnbull’s argument is that we not only need to boost our defence forces for security reasons but we can also use our defence dollars to drive Australian industry, innovation, jobs and growth.

There is no economic modelling behind the policy but Defence Industry Minister Christopher Pyne says the scheme could create “tens of thousands” of jobs for Australian manufacturers.

Camera Icon Malcolm Turnbull tours Austal at the WA Marine Complex in Henderson in may last year. Credit: The West Australian

The policy has been welcomed by Labor and backed by big players such as Thales Australia, which claims Australia has world-leading technologies and some of the “smartest, most capable and skilled workforces in the world”.

The defence export strategy white paper highlights numerous success stories. The 50 firms involved in production contracts for F-35 Joint Strike Fighters, for example, are sharing $800 million in contracts and an estimated 2400 jobs.

The paper also suggests America’s deep defence pockets are a potential gold mine for Australia.

The US Government, which will spend $686 billion on defence this fiscal year alone, selected Australia for the repair and maintenance of the F-35 Lightning II components in the region, and to act as its Asia-Pacific regional warehouse, which BAE Systems Australia estimates is worth $300 million.

But Andrew Davies from the Australian Strategic Policy Institute predicts Australia’s bid to become a top-10 arms exporter will not only fail but will do little to boost jobs and growth.

Davies says the defence spending will give the country little bang for its buck. He says it will serve only to prop up inefficient parts of industry and detract from the overall economy.

He says Australia is the 19th biggest defence exporter in the world but its share of the global arms market is less than half of one per cent.

This would make getting into the top 10 nearly impossible, especially as the top countries territorially guard their own share of the market.

And all this comes at a time when several European countries, South Korea and even Japan are also ramping up efforts to boost their own defence exports as a means of finding new income.

In Davies view, the Government is betting, against implausibly long odds, that Australian companies can push out major multinationals that are already established in the field, such as Lockheed Martin.

But he says the country would have been better to focus on the resources and agriculture sectors and other areas where Australia already has a comparative advantage.

But while the policy is set to disappoint on an economic front, according to Davies, he concedes there are some strategic reasons to pursue greater military self-reliance.

He says Australia and America have coinciding interests in the short and medium term but there is no way of knowing how far Donald Trump’s “America First” policy will go in the long term.

In that sense, he says, it would be smart to ensure we have our own battlefield helicopters and other significant equipment so that our forces no longer have to rely on hitching a ride with NATO or the American military, as they did during the Afghanistan conflict.

But regardless of whether the policy could be an economic or strategic success, the issue has its detractors for ethical reasons.

The Greens have accused the Prime Minister of wanting Australia to become a “massive exporter of death” while the Australian boss of Save the Children, Paul Ronalds, claims an increase in arms and munitions is not the way to deal with increasing global conflict.

World Vision chief advocate Tim Costello has previously said the policy was “exporting death and profiting from bloodshed”.

These complaints have done nothing to alter the Government’s stance.

BREAKING FOREIGN MARKETS

With a head office in Myaree and a factory in Booragoon, Perth’s AVI is as far from the battlefields as you can get. But its high-tech communication and shielded data systems are crucial in combat zones across the globe.

“A soldier can live for weeks without food, days without water, and minutes without data,” co-founder and managing director Tony Routledge says.

Tony and his brother Stewart were barely out of high school 30 years ago when they started their family-owned firm, which employs more than 60 staff across nine offices, including three in the US.

Camera Icon AVI managing director Tony Routledge with the new Surface Mount Assembly Line. Credit: Sharon Smith

In the company’s early days, they focused on creating communication systems for the mining sector, which later evolved into automating court rooms and parliamentary electronic systems.

Their work in mining eventually involved the creation of automated technology used in the production of driverless vehicles and other mining systems.

By the 1990s, the Australian military sought out the company to create communication devices, much of which relied on similar technology AVI had finessed in the development of autonomous technology.

AVI started bidding for US military tenders in the early 2000s but it took several years before their efforts were successful. Its products are now used in critical kill chain systems in parts of the world that the company cannot divulge for security reasons.

Routledge says there was limited help available for WA companies trying to break into foreign markets when he started out 30 years ago.

But he believes the Federal Government’s defence focus will change this by assisting local companies to get on the world stage quicker than AVI was able to.

One essential lesson the company had to learn on its own was the importance of documentation to support the testing of products sold into the US — which now forms a key feature of CDIC’s Defence 101 seminars being held around the country.

“It would have saved us about 10 years of effort if we’d known that at the beginning,” he said.

He says companies deserve the additional Government assistance because the training burden falls largely to private enterprise as universities do not offer courses in the highly specialised field.

He also believes the scheme could assist WA companies in the lacklustre mining sector to transfer their skills to the military, claiming there are strong synergies because miners are used to operating in dry, dusty and risky conditions where safety is paramount.

Routledge credits his success to the company’s exacting standards and the longevity of staff who have been involved from the beginning, helping to ensure consistency of quality.

“We aim for a zero per cent failure rate,” he says.

“If soldiers are carrying communications into battle, they are probably leaving behind some ammunition, food and water supplies, so the system has got to be perfect.”

One of the Federal Government’s bigger supporters is WA’s Austal, one of the world’s biggest shipbuilders. Chief executive David Singleton is particularly supportive of the Government’s policy to expand EFIC funding for defence businesses.

Singleton says access to EFIC finance can mean the difference between a client choosing an Australian company over an international competitor.

And in the event of a default by the client, it can mean the difference between a company going under or staying afloat.

EFIC finance is offered at commercial rates but the agency underwrites the contract, which means Australian taxpayers cover costs if a client defaults.

Singleton says Australia should not baulk at pouring money into arms, but should consider a strong defence sector to be as morally important as a government’s duty to ensure shelter, medical and police services.

“It is absolutely the right aspiration,” he says.

“We need a police force to protect us from those that would do us harm, and we find that comfortable,” he says.

“The defence force is similar but it’s the defence of the country, not just individuals.”