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In Australia, there is much racism, and many derogatory words based on race, such as "Boong".

However, as far as I could tell, racism and the use of derogatory words was done by the bad guys in the movie, such as Neil Fletcher, or neutral bystanders, rather than the good guys (The Drover, Lady Sarah, Nullah, and others). Even though the Aborigines would have much reason to dislike white-skinned people, they were not racist against them.

However, Nullah used the word "Japs":

Them Japs nearly got us. We had to swim'em.

Was he being derogatory about the Japanese when using that word?

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First of all, Wikipedia says that the word "Jap" has not always come with a neccessarily bad connotation but rather developed this way during WWII. So there might be a chance Nullah wasn't entirely acquainted with the nature of this word when saying it.

But other than that, they were at war. During war it is natural for people to develop rather derogatory nicknames for their enemies (be it "Thommies", "Krauts", ...). But this doesn't necessarily come from an inherently racist attitude but mainly from the aversion people are to some degree developing and to some degree forced to feel (be it by propaganda) against their political enemies, concentrating their anger on the people as a whole, but not just because they are Japanese, but because they are fighting them.

So when Nullah was speaking of the "Japs" he was first and foremost averted to them because they were attacking his country and tried to capture him and not so much because he had an inherent aversion to Japanese or Asians in general. He was just speaking colloquially, in "war slang" so to say. So to conclude, it is likely that Nullah was speaking a bit derogatory, but not necessarily with a racist intention.

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