According to Wikipedia "The Australian Red Ensign, is a red version of the Australian Flag and is a reserved civil ensign. From 1901 to 1954 the flag was used as a civil flag, to be flown by private citizens on land, while the
government used the Blue Ensign, reflecting British practice. In 1941, Prime Minister Robert Menzies stated that there should be no restrictions on private citizens using the Blue Ensign on land, and in 1947 Prime Minister Ben Chifley reaffirmed this position, but it wasn't until the
passage of the
Flags Act 1953 that the restriction on civilians flying the Blue Ensign was officially lifted, after which use of the Red Ensign on land became a rarity. Under the
Navigation and
Shipping Act 1912 and the
Shipping Registration Act 1981, the Red Ensign remains the only flag permitted for use by merchant ships registered in
Australia. Pleasure craft may use either the Red Ensign or the national flag, but not both at the same time." We are currently in the
Caribbean and have seen quite a few Australian boats, all flying blue ensigns. Also, in the other Commonwealth countries there is a distinction between the red and blue ensign with one colour usually reserved for
government use. Probably not any advantages to being confused with a
commercial vessel and maybe a few downsides. I think the blue is more immediately recognizable in other
parts of the world.