Police were required to break up about 50 people demonstrating in Corowa, on the Murray River, on Saturday afternoon.
A group of balaclava-wearing men were spotted huddled under a sign that read 'white man fight back'.
A video posted online shows the group's leader, Thomas Sewell, delivering a tirade suggesting white people are being "pushed out" of their towns.
Neo-Nazi Thomas Sewell is self-appointed leader of the National Socialist Network. (James Ross/AAP PHOTOS)
The war memorial the group rallied in front of commemorated WWI and WWII, including those who fought the Nazis.
Police said no arrests were made but inquiries into the incident were ongoing.
A Melbourne resident, who grew up in Corowa and was in town visiting family, told AAP she was at a community garden near the main street when she heard a commotion.
"We heard the chanting 'white man, fight back'," said the woman, who did not wish to be named.
"It's a small, sleepy town usually so to hear anything coming from the main street is odd but to hear that being chanted through the street was appalling."
In his tirade, Mr Sewell alleged foreign companies had purchased businesses within the town to fire locals and "import cheap labour from the third world to replace them".
"Almost all the men here suffered on behalf of fighting for white Australia, not in the way our Anzacs have, not in the way their ancestors did, but in a different kind of war, a war for the spirit of this nation," he said.
"The people that are destroying this country are doing it out of greed and out of hatred for us white Australians."
Victorian Premier Jacinta Allan said her state would continue to strengthen anti-vilification legislation, having already banned the public display of the Nazi salute.
"It is still disgraceful, it is cowardly, it is hurtful and it is hateful, and there is absolutely no no place in any part of our community or organisation for this sort of hateful behaviour," she said.
Deputy Opposition Leader Sussan Ley, who is the local federal MP, condemned the white supremacy but said she was heartened community members had made it clear to them racism had no place in Corowa.
"I am saddened this hate was forced upon members of my community, including many families who were simply enjoying their weekend, the day before the Corowa Show," she said.
Sussan Ley says she's heartened community members made it clear racism has no place in Corowa. (Mick Tsikas/AAP PHOTOS)
On Saturday, a 65-year-old Victorian police sergeant was interviewed as part of an investigation into allegations she twice performed the Nazi salute.
She is accused of approaching two employees on Tuesday afternoon and performing the salute, as well as uttering the words "heil Hitler".
In a post family violence scenario debriefing with a recruit squad and another instructor, the sergeant again allegedly performed the salute and said "heil Hitler".
State and federal governments have banned Nazi symbols and gestures following concerns about a rise in anti-Semitism.
Neo-Nazi Jacob Hersant, 25, became the first Victorian found guilty of intentionally performing the Nazi salute in public on Tuesday.
Jacob Hersant faces jail after being convicted of intentionally performing the Nazi salute. (Joel Carrett/AAP PHOTOS)
Hersant walked free from court on Wednesday but Magistrate Brett Sonnet has indicated he will be sentenced to jail on November 8.
A Sydney court was told last month three men accused of performing Nazi salutes outside an inner city Jewish museum in 2023 were joking, with one saying he was mimicking the act of British comedian Ricky Gervais.
The trio have pleaded not guilty to charges of behaving in an offensive manner in public and knowingly displaying Nazi symbols without an excuse.
24°C