The Commonwealth Government Federal Design Competition required an official flag and a merchant or shipping version of the same design. As a result, the official flag was blue and the merchant flag was the traditional Red Ensign, featuring the distinctive Southern Cross and Commonwealth star.
In 1903, the Southern Cross stars were altered from nine, eight, seven, six and five points, to four, with seven points and one five-pointed star. The original variety of points was an indication of the relative brightness of each star as it appeared in the night sky.
In 1908, the current Commonwealth star of seven points replaced the earlier six-pointed star. The Shipping Registration Act of 1981 reaffirmed that the Australian Red Ensign was the proper “colors” for Australian registered ships and that private pleasure craft could fly either the Red Ensign or the Australian National Flag