"We are currently investigating and awaiting legal advice as to what, if any, offences have been committed," Leading Senior Constable Shayne Riggall said. The matter has also been brought to the attention of Yarriambiack Shire Council, however, chief executive Jessie Holmes said the council did not have the power to request the home owners take it down. Loading Replay Replay video Play video Play video "We are aware the flag is causing a level of concern. What the flag represents is not in line with the values of council and we are disappointed it is causing offence in the community," she said. "However, we don't have a particular level or provision that enables us to act on that. We have received no specific complaint from a person in the community but it has been raised with us that it's there."

When contacted by The Age, home owner Cheryl Lawdorn, who bought the house with her partner last year, defended her right to fly the flag over her own home because of her German ancestry. Loading The chairman of the Anti-Defamation Commission, Dr Dvir Abramovich, who has been campaigning nationally to ban the sale and public displays of Nazi materials and insignia, described the flag as a "stomach-turning outrage that is a stain on our community". "The flying of the Nazi flag in the skies of our nation is like plunging a dagger in the heart of Holocaust survivors and spitting in the face of the Diggers who fought to defeat Hitler and his genocidal regime," he said. "In the aftermath of the massacres in Christchurch, Halle, El Paso, San Diego and Pittsburgh, perpetrated by white supremacists, and a dramatic surge in anti-Semitism in Australia, we should be alarmed about anyone who so openly identifies with the unspeakable crimes of the Third Reich.

"This goes beyond owners' rights, and we all have a responsibility to speak up when such hateful acts take place." When State Parliament resumes this year, Dr Abramovich will call on the government and the opposition to immediately pass legislation banning the public display of Nazi insignia. The flag flying over a home in the Victorian town of Beulah. The furore over the flag comes as the state government prepares to review Victoria's anti-vilification laws after Reason Party MP Fiona Patten pushed to widen the Racial and Religious Tolerance Act. Ms Patten's bill aims to widen the state's legislation to include hate speech targeting people for their gender, disability, sexual orientation or gender identity. At present, laws only covers racial and religious vilification and have resulted in just one prosecution in 17 years.

It has been referred to the legal and social issues committee in the lower house and a bill could be debated next year. It is expected the committee will look at the public display of paraphernalia such as swastikas. Liberal MP James Newbury, who is the deputy chair of the legal and social issues committee, condemned the flying of the flag and said he believed it had "no place" in society. "The Nazi swastika represents racial supremacy and is in reality a symbol of mass genocide. The Victorian Parliament is currently reviewing our state’s anti-vilification laws. My view is that the flag incites hatred and has no place in our modern society," he said. A government spokesman said: "Items that promote hatred and violence have no place in Victoria – it’s disgusting that someone thinks it’s appropriate to fly this flag.

"Last year the legislative assembly’s legal and social issues committee was asked to look at the effectiveness of existing anti-vilification laws and the possible expansion of protections." The inquiry will look at the effectiveness and enforcement of the act, whether it should be extended to protect groups who don't currently fall under the act, how to address online vilification and whether there is increasing vilification in Victoria.