JDon - there might be increasing numbers of "Asians" in the country, but saying that Australia is being "taken over" by Asians (or any other group for that matter) is incorrect. The statement has negative connotations and is factually incorrect, because there are clearly more migrants who are not of Asian background than there are Asian migrants in Australia - look at all the Kiwis and Poms. Just because your Asian friends laugh it off does not make your statement correct, or make it less offensive. In fact, don't stereotype all Asians to be the same - just because your friends are ok with it doesn't mean other people won't - and I meant other people, including non-Asians.
To put it bluntly, it's just as incorrect as saying all Poms in Australia are whingers and racist, especially those that leave the UK because they are sick of the migrants there. Now just because I'm British and don't find that offensive, does it mean it is all OK? Come on - just because Asians look different you say that they are "taking over" the country. If you could spot whether someone was a British or Kiwi migrant on the street so easily in Australia, you'd think those people are "taking over" the country too.
And I'm British and not Australian.
I would agree that there are a lot of Australians who are racist, but there are also many who aren't. Those that don't speak English well at universities in Australia are likely to be from non-english speaking countries, i.e. international students, and most international students in Australia are from Asia. But that doesn't mean that all Asians have very poor English. Sigh.. I really hate people that make sweeping generalisations and make race-based stereotypes.
And mml - you would also find that the selective high schools in NSW have 99+% Asian-Australian students. These students continue to do very well at university, so it really depends on the university you go to etc..