Dick Smith is furious that a television advertisement he filmed for Australia Day, which is saturated with "Dick" jokes and innuendo, has been deemed too offensive to air during prime time television.

The entrepreneur said he was considering taking legal action after his one-minute advertisement, which promotes Smith's range of Australian-made food products, was given a PG classification and was therefore unsuitable to screen during 6pm news bulletins on Australia Day.

The tongue-in-cheek advertisement, created by Australian comedian Dan Ilic, opens with Smith declaring that Kekovich's use of jingoistic patriotism to sell his products was as "wrong as a dead dingo's donger".

But, with Waltzing Matilda playing in the background, Smith then goes on to do exactly that, throwing in his fair share of "Dick" jokes along the way.

An elderly woman wearing a cardigan says: "There's only one Dick I'll be eating on Australia Day," while a farmer ploughing his fields proclaims: "I love Dick".

Smith also urges the audience to "chow down on my OzEnuts [peanut butter]" and "shake my OzEsauce [tomato sauce]."

A group of asylum seekers are pictured coming ashore, as Smith presents them with some OzEmite and says: "The taste is a beauty, why else would thousands be trying to get here?"

Smith told Fairfax Media he was contacting his solicitor on Wednesday after Commercials Advice gave the advertisement a PG rating.

Smith had booked A$100,000 ($125,333) worth of ad space during 6pm news bulletins on Australia Day, but only advertisements rated G can be aired during that time slot.

"The ad is harmless fun. Yes, it does have a couple of 'Dick' jokes, big deal," Smith said.

"I think it's harmless, it's good fun and these people should reverse their decision and on Australia Day let me run the damn thing. They're talking about beeping it out and I said, 'No'.

"The ad is not politically correct. See, everything has to be politically correct these days. What about the old larrikinism?"

Smith was in China yesterday when he heard about the classification problem, and cut his trip short to return to Australia to sort it out.

He said he had hired Ilic to write the advertisement on the advice of Andrew Denton, and initially did not like the ad.

"I'm not into dick jokes. I'm an old bloke, I'm 68," Smith said.

"But when I read it to all the workers here at Dick Smith Foods, and most of them are in their 20s and 30s, they just loved it. Oh, they rolled around the floor and they said, 'This is the best ad ever'."

Tim Allerton, managing director of City Public Relations, said the ad appeared to be a bit "clunky and rough", as many of Smith's ads were. But the decision to give it a higher classification rating was "completely wrong", he said.

"They've had a complete humour bypass at this organisation [Commercials Advice] and they should be ashamed of themselves," he said.

"Dick Smith and other major entrepreneurs around Australia have made their names with this sort of advertising, and there has never been any problem with the use of the word 'Dick' in any of Dick Smith's advertising, from what I understand, for the past 30 years.

"If [Commercials Advice] is being politically correct, it's actually had the reverse effect because I believe, through the digital world, this ad will get a lot more exposure than it would have through running some spots on news programmes."