Is it ok for me to use my Malaysian driver license in Australia. Do I need to sit a test?

You can't use your license here so you'll probably have to get an Australian license. I don't think you have to do an actual driving test but I think you might have to do the written test again (this has give way questions and other questions about Australian roads) - which is only like $30. Then if you p they will take a photo of you and make your new Australian license, so it's not that expensive.