Police in Western Australia are investigating an alleged white supremacist themed Australia Day party in the rural mining town of Kalgoorlie after photographs of a home-made Nazi flag were shared on social media.

The photograph, with the caption “Stay white Australia” and “Happy victory day”, was posted on Facebook and showed two men holding up the flag, while about a dozen other people looked on.

The image was picked up by the Aboriginal and Torres Strait Islander news site Welcome to Country.

Goldfields-Esperance acting police superintendent Tony Colfer told the ABC the “hurtful” images would not be tolerated.

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“We don’t tolerate this kind of behaviour in our community,” Colfer said. “These people need to have a serious think about what they’re doing, because material like this hurts everybody.”

Kalgoorlie has had a persistent problem with racist material posted on Facebook.

Before the death of the Indigenous teenager Elijah Doughty 17 months ago, a now-deleted Facebook page called “Kalgoorlie crimes whinge and whine” recommended vigilante action in response to a perceived rise in burglaries in the Goldfields town, which had been attributed to Indigenous children.

Doughty died after he was run over by a non-Indigenous man in a 4WD, who believed the 14-year-old had stolen his motorcycles. The man was sentenced to three years in jail for causing death by dangerous driving.

The image of the Kalgoorlie party followed weeks of heated debate about the push to move the date of Australia Day from 26 January – the date that marked the arrival of the first fleet – to one less hurtful to Aboriginal and Torres Strait Islander people.

Malcolm Turnbull has said the date will not change while he is prime minister.