Since July 1, politicians have had a "single office budget" of about $98,000 for senators and about $130,000 for lower house MPs, which combines entitlements for publications, stationery, printing, software and flags.

Mr Katter said: "I'm utterly ashamed of myself that I was number two. I have a lot of work to do." When he was told the flag budget will be capped, he said he will be moving immediately when Parliament resumes to have the cap removed. "It shows monumental stupidity and a total lack of Australianness in the government," he said.

Mr Scott said the flag budget was "extremely well spent" and the high spending reflects the community demand for the national symbol in light of the ANZAC centenary as well as the nature of his electorate, Maranoa.

"I think I am able to draw on other parts of my allowance to meet the demand. My electorate has 171 schools, as opposed to a city electorate that may not even have a school," he said.

"I will not stop giving out flags, because I think it is a great symbol that unites us regardless of our ethnicity, religion or our status in the community."


The half-million-dollar spending on flags has coincided in the second half of 2014 with rise in security threats and dramatic terrorist raids in Brisbane and Sydney; andattempts to ban the burqa in public galleries and the wider community

Charles Sturt University professor Nick O'Brien said as a counter-terrorism strategy, investing in the national symbol was likely to be ineffective. "It wouldn't stop anyone who was contemplating terrorism," he said. "It would be sensible to have limits on how many flags they give out because in times of austerity you could spend literally millions of dollars giving out flags to people."

Harold Scruby, executive director of Ausflag, which advocates changing the flag, said the high MP spending on flags dispelled the argument that changing the flag would be too costly.

"Lots of flags outside have to be replaced regularly in about three to six months," he said.