"The Aboriginal flag is a national symbol. It is recognised by everyone in this country. And the idea that it can be privately owned by a company to me just does not seem right."
Indigenous charity sent bill for $2,200
WAM Clothing was given exclusive rights to use the flag on garments after a deal with Luritja designer Harold Thomas earlier this year.
A not-for-profit Aboriginal medical service, the Indigenous Wellness Centre in Queensland, had to pay $2,200 to WAM Clothing last month for giving out T-shirts with the Aboriginal flag design to patients.
WAM clothing claims it is the “exclusive worldwide licensee for the use of the Aboriginal flag on clothing, physical media and digital media”.
The terms of the deal have not been disclosed, with the company citing confidentiality.
In a statement, WAM Clothing said interested parties seeking more details of the licence and what it involves "are invited to contact us".
Calls for 'monopoly' to stop
Other groups report being sent 'cease and desist' letters for using the Aboriginal flag on T-shirts and on social media.
Aboriginal health promotion business Spark Health Australia says its Clothing the Gap products with the Aboriginal flag prompted the letter to be sent to them.
The group has since started an online petition calling for a change to the licensing deal.
Aboriginal businesses told not to use Aboriginal flag
"Should WAM Clothing, a non-Indigenous business, hold the monopoly in a market to profit off Aboriginal peoples' identity and love for 'their' flag?" the petition reads.
"We believe that this control of the market by a non-Indigenous business has to stop."
A Facebook group called “New Aboriginal flag or flags discussion” also received a letter because of its “use of the digital image of the Aboriginal flag on social media platforms are [sic] being used in a negative light”.
'Symbol for all Australians'
Ms Burney, who is also Labor's spokesperson for Indigenous Australians, said the national significance of the Aboriginal flag should prompt the federal government to intervene to stop the cascading effects on community groups.
"I think the government needs to step in and see whether or not something can be done to secure this flag in perpetuity for Aboriginal organisations, Aboriginal people and the broader community," she said.
"This flag is more than a symbol for Aboriginal people. It is a symbol for all Australians. It is a recognised flag under the Flags Act.
"It is flown in many public places. It is displayed in a number of parliaments across the country. So I think people need to know where they [the federal government] stand. There needs to be some honesty."
Federal government urged to re-examine issue
Indigenous Australians Minister Ken Wyatt has said previously the federal government will not be buying the copyright for the Aboriginal flag, saying public statements suggest a solution could be underway with Harold Thomas and WAM Clothing open to working out ways for the image of the flag to be used.
Ms Burney urged Mr Wyatt to reconsider his stance.
"I would urge him to re-examine the issue, particularly in light of recent developments.
"And for the government to look at - as it has with other flags - look at who really has the rights for this flag. And talking to those involved that are really scaring people, quite frankly."