I also noticed the flag about 2 weeks ago when I updated my Mount Everest tour (http://www.gearthhacks.com/dlfile294...erest-tour.htm).
Australia is a big country, so I guess a bit of credit can be taken from the outmost eastern part (aka NZ) where New Zealander Edmund Hillary comes from, allthough I'm not completely sure that Kiwi'es agree . I would never indicate that the Spanish creator of the well done 3D model who title the model "bandera de nueva zelanda en el monte everest" may have confused flags of the southern hermisphere
Several Aussies has reached the top, so I guess it's okay that they were the first to have a 3D flag there! Someone had to do it!
A small note: The most exact current position of the top is about 34.20 meters / 112.21 feet south of the current google earth topology shown top.
Edit: please note that the file zooms very heavily into the top. If graphics fails, doubleclick on folder or placemark to re-view, re-fresh the display angle