Member for Caulfield David Southwick and two former Beulah residents have started a petition calling on the Legislative Assembly of Victoria to take action against anti-Semitism.

"We, the undersigned citizens of Victoria, call on the Legislative Assembly of Victoria to note that signatories of this petition condemn in the strong possible terms the recent flying of a Nazi flag above a residential premises in the town of Beulah, Victoria," the petition reads.

"This unfortunate incident has clearly demonstrated the pain, anger and division the public display of the Nazi Swastika causes and believe this message of hatred has no place in our state.

"We therefore call on the Victorian State Government to introduce new legislation to ban the public display of the Swastika in Victoria."

Mr Southwick had previously called for the flag to be removed in a social media post on Facebook.

"As we have seen anti-Semitism is on the rise in Australia more needs to be done to stamp out this hate," he said.

Former Beulah residents and best friends Hannah Coffey and Elissa Muller contacted Mr Southwick's office after the incident.

"Elissa and I both felt the same way about the situation. We wanted to show that the flag did not represent the town we knew and loved, and where we grew up," Ms Coffey said.

"We didn't want Beulah to have this ongoing association with it. It's up to individual people to decide whether they want to sign the petition."

It comes after the Beulah Historical, Learning and Progress Association hosted a community barbecue on Saturday to show that the true nature of the community was "kind, generous and welcoming".

Attendees brought a range of flags to the event including Aboriginal flags, a Torres Strait Islander flag and a Pride flag. Flags from various countries including Australia, Japan and South Korea were also on display.

Copies of the petition were handed out at the event.

Association member and Ms Coffey's mother Vivian Townsend said the event was held to show the world that Beulah was a "lovely place to visit".

"We want to take a bit of distance from the flag; we don't want Beulah to be synonymous with it," she said.

"We are a lovely town and welcome people from no matter what walk of life they are from. This flag doesn't represent us and we are more than it."

She said the petition would be available to sign at the Beulah Business and Information Centre.

Mr Southwick's office confirmed the petition would be presented to Parliament once it resumed.

"What we found was that there was a void in powers to get the flag removed. It took the hard work of the Yarriambiack shire and local police to remove it," Mr Southwick's office said.

"It showed that there's a hole (in legislation) that needs to be fixed."

People wanting a copy of the petition can contact Mr Southwick's office on (03) 9527 3866.