An Indigenous affairs adviser to Prime Minister Tony Abbott has apologised for wearing a Confederate flag costume to an event, saying he was "unaware" of the flag's connection to racial tensions after a mass shooting in the United States.

Mark Coffey, who works for the Department of Prime Minister and Cabinet in the Northern Territory, was photographed wearing the costume last weekend at the Central Australian Beef Breeders' Fourth of July themed dinner.

A 21-year-old white man charged with fatally shooting nine African Americans at a church in the south-eastern US city of Charleston last month posed with the Confederate flag, which is seen by some as a symbol of white supremacy, before the massacre.

In a statement to the ABC, a spokesperson for the Department of Prime Minister and Cabinet said Mr Coffey was sorry.

"The officer has apologised unreservedly, and regrets that offence has been taken," it said.

The Federal Indigenous Affairs Minister, NT Senator Nigel Scullion, said Mr Coffey's apology "should be the end of the matter".

"It was clearly in circumstance that he was unaware that it might give offence," he said.

"What I understand from a letter from the department, which apologises for his lack of judgement, is that he was simply unaware of the circumstances that recently happened in the United States.

"I don't think he can behave any better than he has; he's unreservedly apologised for any offence given and that should be end of the matter."

NT Labor Senator Nova Peris said the costume was inappropriate and Mr Coffey should be criticised for his decision.

"We are trying to move on from those days we are trying to build a more inclusive country," she said.

"I think whenever you go out in public and how you are perceived in public has got to draw some attention to the individual that has put himself out there."

South Carolina lawmakers have passed legislation to remove the flag from the state's capitol building since last month's massacre, with US retailers pulling it from sale amid a public backlash.

US president Barack Obama praised the removal of the flag.

"For too long, we were blind to the pain that the Confederate flag stirred in too many of our citizens," Mr Obama said on June 27 at a eulogy for the pastor killed in the attack.

"As we all have to acknowledge the flag has always represented more than just ancestral pride.

"For many, black and white, that flag was a reminder of systemic oppression. And we see that now."