I saw this song. It was written in the 90's in response to the rise of the far right in Europe. I was wondering what the term was referencing. I suspect it has something to do with German fascisms, but I'm not really sure.
"Das Ausland" is a term meaning "the abroad", basically everything that isn't the country the speaker is in. "Ein Ausländer" is an alien (in the legal sense). This is (or was ?) basically a neutral term - the immigration office in Germany is called "Ausländerbehörde" for example -, but it has been stained by connotations over time, especially due to its use by xenophobic political right-wingers.
In the 90's, the far right was on the rise in Germany, especially, but not only, in the "neue Bundesländer" that had formed the GDR before 1990. Far-right parties were entering the parlaments of the Bundesländer and of the Bund, and xenophobic crime numbers were as high as they had never been after the Nazi era.
One of the slurs/slogans of the new neo nazi movement of that time was
"Deutschland den Deutschen, Ausländer raus!" (Germany to the Germans, Aliens out!)
Neo nazis marched through the streets chanting that. In some villages and cities, foreign looking people were assaulted, even killed by neo-nazi gangs.
The German word for xenophobia is "Ausländerfeindlichkeit" (literally: hostility towards aliens), and it was and is prevalent in German society, like it is in most western societies nowadays. The term doesn't have a direct link to the fascism of the 1920 to 1940s that was more about "races" and jews, but it came into broader use in the 1960s when the first foreign workers from southern Europe ("Gastarbeiter") came to Germany to work in German factories.
So that is the context of the song "Ich bin ein Ausländer." The band solidarise with the many victims of xenophobia, hatred and assaults of the 1990s.
After a bit of extra research I have a few things to add. The song is full of historical references to fascist ideologies.
The "It can't happen here." Lyric was in reference to Sinclair Lewis's novel that warned Americans that fascism is not a problem unique to Europe.
The "when they come to etchnically cleanse me." Is in reference to Martin Niemoller's famous 1946 speech where he criticised the anti-nazi intellectuals for not doing enough to stand up against fascism. A stylised version of this speech can still be found in many memorials.
The use of the word 'ethnically cleansed' is incredibly provocative as this was the deplorable language the Serbs used to defend the attempted genocide of the Bosnians.
"Politics of Hate" is in reference to the 1968 editorial in the Times which called for the expulsion of Enoch Powell from the torie party for his "Rivers of blood" speech.
The "freedom of speech does not make it ok" is in reference to the case in the 90s where a BNP politician was asked to not use terms like 'paki' and 'darkie' on air by the BBC. When he refused the BBC refused to air the racist rant. Which in turned made the BNP a martyr for the cause of freedom of expression.