It's not really racist. Well, it is, but because the majority of the people are cultured anyway, it's mutual racism. A generally accepted break down is that one-third of the school is Asian, one-third Indian/Sri Lankan etc, and one-third 'White' (Aussies, Europeans etc). Everyone's aware of the cultural stereotypes of each group and we all played along with them and didn't get offended because we know everyone's joking. Hell, even the teachers would crack the same racist jokes but it's just part of the culture of the school because the majority of people are cultured anyway. You can't really discriminate when no one in the school is a majority in itself - each group alone was a minority when compared to the remainder.
I remember my English teacher who recently came from America was shocked at the dynamics of the school, since yeh, it was pretty blatantly racist with people just calling each other the curries, Asians, Jews etcetc, and she compared this to calling someone nigger in America where that'd pretty much get you bashed or worse immediately. But yeh, it's just mutual acceptance. The label is something used more affectionately rather than with malice. This then contrasted with coming into uni where me and a few other friends from MHS, as well as a few other schools with a similar culture (Haileybury comes to mind) realised that we couldn't be overtly racist to anyone anymore and get away with it. Was initially quite hard working around that awkward moment when someone actually got offended by the word 'curry' =/
But honestly, it's actually the opposite of true racism. It's kind of paradoxical racism I guess because we only make racist comments because we don't actually see race as something to be ashamed of or to be much considered. You end up just getting so caught up in the multi-cultural nature of the school that race seems like a non-issue anymore. It's really because we know that everyone's not racist that we are able to crack these sorts of jokes, since we all know that we're all kidding and it's just some light-hearted humour. This is just my (poor explained) take on it, but I'm sure most other MHS boys would agree with me, or at least have a vague idea of what I'm talking about, on the dynamics of the culture. It's pretty difficult to explain really; it's something you need to experience yourself to understand.