The law clearly defines what racism is for an Australian citizen. To say that this definition bears no weight for an Australian citizen because the target of the abuse resides outside of the Australian legal system is pretty limp, IMO.
I am only guessing but I suspect the reason is when referring to another country it is the country and the culture etc.
But I can tell you that what is said about Iraqis for example and where Iraq is the reference the same remarks about Iraqis living in Australia would cause the call to be terminated.