Destroying a tattered national flag is a delicate task often shrouded in customs and tradition — but one Government department has a more low-key approach: scissors and the rubbish bin.

The Federal Government has been deciding whether to announce formal instructions on how to retire a damaged flag with the "appropriate dignity and respect".

In the meantime, the Department of Prime Minister and Cabinet (PM&C) has taken to cutting up flags outside its Canberra office and throwing them in with the general waste.

"The flags are disposed of by cutting them into small unrecognisable pieces, then putting them in the normal rubbish collection, in accordance with the Australian National Flag protocol," a PM&C spokesman told a Senate committee.

The department insisted the flags were "disposed of privately, in a dignified way", but with no standardised method, that was open to interpretation.

The existing protocols give detailed instructions on how to store and fold flags, but not destroy them.

Government asking for flag retirement feedback

The Government admitted the lack of certainty was causing some confusion and has asked for feedback on retirement options — including a ceremony featuring a moment's silence and a welcome to country.

The Government admitted there was some confusion over how to destroy a flag. ( AAP: Lukas Coch )

The flag would then be "ceremonially cut into three pieces with solemnity", the proposal said.

So far, 23 submissions have been presented to Assistant Minister to the Prime Minister Senator James McGrath.

"I believe a protocol will give schools, clubs, or organisations a sense of formality around flag retirement," Senator McGrath told the ABC.

"Our National Flag is a symbol of great importance to all Australians, so it seems fitting that people have the opportunity to reflect on the significance of our flag in a meaningful way at the end of its service also."

Politicians spent more than $750,000 on flags in six months

Our politicians have a special interest in this subject, given they have ordered more than 127,000 Australian flags in less than two years.

The flags cost taxpayers more than $750,000 in six months.

They are usually given to clubs and schools, who do not know what to do with them once they age.

Australian National Flag Association president Alan Pidgeon said PM&C had not done anything wrong, but their actions show the need for a formal retirement ceremony.

"The traditional way to dispose of a flag is to burn it in private, but the flags are now made of materials that you shouldn't burn, so the process is to cut it into pieces until you cannot recognise it's a flag," he said.