The flag, designed by artist Harold Thomas, is now free to fly for Australians without permission or payment of fees. The deal ends a long-running dispute about the flag's public use.
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The Australian government has acquired the copyright to the Aboriginal flag for US$14 million (€12.3 million), making it free to fly without the threat of legal action.
This marks the end to a long-term dispute which had restricted sporting teams and Aboriginal communities from reproducing the image.
The Aboriginal flag has been recognized as an official flag of Australia since 1995, flown from government buildings and embraced by sporting clubs.
Prime Minister Scott Morrison said the government had "freed the Aboriginal flag for Australians." He added it could now be used in apparel, on sports grounds, and in other medium "without having to ask for permission or pay a fee."
"Now that the Commonwealth holds the copyright, it belongs to everyone, and no one can take it away," said Minister for Indigenous Australians Ken Wyatt in a statement.
The announcement came on the eve of Australia Day, a national holiday.
Why was the Aboriginal flag disputed?
The flag was designed by Aboriginal artist Harold Thomas, and had become a symbol of demonstration and protest for Australia's Aboriginal people.
"I hope that this arrangement provides comfort to all Aboriginal people and Australians to use the flag, unaltered, proudly and without restrictions," said Thomas.
In the last 50 years, there had been intense debate about the flag's use after Thomas had given rights to companies to use the flag on their products. One of these companies, WAM Clothing, sent cease and desist letters to organizations such as the Australian Football League, for using the Aboriginal flag on clothing.
The government has now paid to terminate the licences held by the companies.
As part of the deal, a scholarship has been set up for Indigenous students for $100,000 in Thomas' name.
The controversy over Australia Day
Celebrating January 26, best known as Australia Day, has become increasingly controversial in recent years. DW looks at the different issues surrounding the contentious date.
Image: Getty Images/C. Bennetts
January 26
January 26 is Australia's national day. It marks the arrival of the First Fleet of British ships at Port Jackson in Sydney in 1788. The Australian government describes Australia Day as a day to "celebrate all the things we love about Australia." But for many Aboriginal and Torres Strait Islander people, January 26 marks the beginning of the loss of their culture, people and land.
Image: Getty Images/C. Bennetts
'Invasion Day'
The movement to change the date of Australia Day is continually growing in Australia. This year, tens of thousands of people attended rallies across the country in support of Indigenous Australians and to call on the government to change the date. January 26 is often referred to as Invasion Day or Survival Day by Indigenous people and those who support moving Australia Day to a different day.
Image: picture-alliance/dpa/G. Hunt
Citizenship ceremonies
January 26 is also the day that thousands of people across the country become Australian citizens. The biggest ceremony was held in the city of Parramatta in Sydney, with 1,450 people. New citizen James Golestani, 52, told Australian broadcaster SBS that he came from Iran and is of Persian ethnicity. "I feel really, really on top of the world. All of my dreams came true today," Golestani said.
Image: picture-alliance/dpa/B. De Marchi
'Change the date'
A number of councils had their power to hold citizenship ceremonies revoked in 2019, after they voted to change the January 26 date for their citizenship ceremonies out of respect for Indigenous Australians. This led Prime Minister Scott Morrison to devise an Australia Day plan that would oblige all councils across Australia to hold citizenship ceremonies on January 26 from the year 2020.
Image: Reuters/S. Nicol Bikes
Alternative dates
A number of alternative dates have been put forward as replacements for January 26. One is May 27, the date in 1967 that Australia held a referendum to include Indigenous Australians in the census. March 12 is another, on this date in 1913, Australia's capital city Canberra was officially named. A popular one is also May 8, due to it sounding similar to one of Australia's most used words — "mate."