The island of Bali in Indonesia is a holiday destination particularly popular with Australians. The song names a number of locations on Bali, including Denpasar (the capital, and location of the main airport), Legian, Ubud, Peliatan, and Kuta Beach.

'losmen': a cheap hostel (Indonesian)
'bemo': a shared taxi/minibus, a common form of transport on Bali
'Mercurochrome': brand of topical antiseptic, used to treat minor abrasions
'Bali belly': minor intestinal problems experienced by many travelers, caused by local bacteria
'mozzie coils': insect repellent, such as pyrethrin, in the form of a coil that is lit to make smoke that repels mosquitos
'Flying Kangaroo': slang for Australian airline Qantas, whose aircraft have kangaroos on the tail
'Tullamarine': location of Melbourne airport
'sprayed me on the plane': the cabins of aircraft landing in Australia are sprayed with insecticide before passengers disembark
'went through my bags like McCartney in Japan': in 1980, musician Paul McCartney of the Beatles was arrested and spent several days in jail after Japanese customs found drugs in his luggage
'gamelon': style of Indonesian music