Australians, generally, do not like be told what to do or how to behave. They like fun. Especially the sort of fun that amounts to a giant middle finger to bullshit regulations telling them what to do and how to behave.
So when their athletes hang a giant boxing kangaroo flag from their Vancouver condo, they are explaining something to you. You really ought to let them get away with it, because the Aussies are wonderfully rebellious and are probably quite happy to create an international incident over it. In fact, I bet they're looking forward to it. And it's not like you're having enough problems already (Hmm, the only more disruptive than a rule bound Aussie, is a bored rule-bound Aussie). On second thought, please do try to make them take it down.
*Many Canadians, in my experience, tend to be more rule and norm adhering/possessed/obsessed than our antipodean cousins. Pot laws and the Conservative Party notwithstanding.