Please apply for the international license. Different Ozzie states and different policeman have different SOP/ awareness. Also Asian sensitivity is much higher nowadays so police tend to be no nonsense.

You do not want to be charged, drag to police station or get into accident and your insurance is not valid.  Also there are unique traffic rules in Oz esp Melb city such as hook turns due to trams.

Get the International Licence/ Permit from UTC.

I have no issues regarding using the Malaysian license during my previous visit with 3 different rental companies (it was 3 years ago). However, having the IDP is a good idea as a backup.

Pls triple check against the specific road transport department for the specific state you are visiting.  Example, VicRoads for Melbourne, Victoria. 

If you want to rely on free advice (99% will turnout to be the most expensive and painful advice), please verify first.

Also call or email the car rental company in advance to separately check.

Where are you going specifically?
How long will it be?

For some states like NSW (Sydney), you can use Malaysian license, I used it for 4 years, (only came back this year)

Other states should be fine if its less than 60 days, check with the company you're renting with, they would specify the things required

Please read the rule book of the state you're going, Melbourne traffic crossing is particular, Sydney is just hectic, Perth not too bad,

If you're going to the Syd/Melb, its better to take public, parking and traffic is a bane overthere, police like to give out summons like nobody business. Uber/Ola would be your best friend, (Sydney buses are opposite of Malaysian, always on time but slow as f*ck)

If you're taking a kid, please rent a child seat as well, and just pay for the most expensive insurance, it'll be less of a hassle if anything happens, trust me. Make sure if you're driving through tolls, rent a "tag" or else they put on service charge

If you're going to Syd area, go to hunter valley, about 1/2 hrs away (like everything interesting in SYD), there's lots of wineries.

Just be wary of cab drivers, they drive like where they came from  . In the city, drive cautiously, speed camera everywhere, the rental will charge you a service charge if you are fined.

One more thing, if I recalled correctly, Australia shut-down inbound flights for 6 months, starting march I think