We will be in Australia for a few days and I was considering renting a car. Is a standard European license (we have Polish and Italian) good enough, or do we need "international driving license"? We live in London, so getting the latter one is a major obstacle.
This is a common misconception. There is no such thing as an "International driver's licence". What you need is a "International Driver's Permit" which is a translation into multiple languages of your original licence, and is only valid when presented with said licence at the same time. The IDP does not give you any more rights to drive in a country than you had before (there's no tests or anything), but allows others to decipher your license.
According to Austroads (which was linked from an AU Government Site) it appears you do need an IDP, OR (and this may help you) an English translation (but also strangly seems to say you need an IDP if it is in English, but I think that's just a grammatical error).
Please be aware that a person who is driving in Australia must carry the overseas licence with them at all times whilst driving along with either an International driving permit OR an English translation if the overseas licence is not written in English.
Also note that each state can have different rules, so check here (archived link, information may not be current):
Australia is liberal for renting cars - and a foreign (not necessarily, "international") license will suffice, as long as the credential can be deciphered. I would recommend purchasing insurance from the rental company for additional peace of mind. Lastly and most importantly, remember to look right :)
A quick search on Google got me this info -
If you’re a visitor and hold a valid driver’s licence (in English) from your own country, fine, you’re allowed to drive throughout all of Australia. (But an international driver's licence, if you have one, does not by itself give you the right to drive in Australia.)
If your driver's licence is not in English, a translation may be necessary and you may also need to have an international driver's licence.