The heating systems in the air-cooled Volkswagens, all of them, is relatively crude and somewhat anemic, but it does work.
It starts with the cooling fan in the fan shroud on the engine. The cooling fan draws in air to keep the engine oil / cylinders cool. This air, heated by the engine, is transfered via the accordion-looking cardboard tubes leading from the fan shroud to the heat exchangers or "heater boxes" that are attached to the exhaust. The hot exhaust system further helps to heat the air as it passes into the heat exchangers. From there, the hot air collected into the heat exchangers passes into the passenger cabin via the heat channels. There are two heat vents that come out under the back seat through the kick panel, and two vents that flank either side of the front seat area, near the floor, generally under the doors and to the front.
There are, from there, depending upon how intact one's Volkswagen is, a further network of cardboard tubes, thinner than their counter parts in the engine compartment, but similar, that are supposed to carry hot air all the way to the defrost vents at the top of the dash board. Seldom, however, does the hot air make it that far to the front of the car. It is usually cooled considerably by the time it travels that far forward.
The levers to either side of the parking break work as follows, according to a VW owner's manual I happened to recently acquire. I will paraphrase, based upon what I've learned from the manual, and my own experience: The lever beside the passenger seat basically turns the heat on or off... up for on, down for off. All that it really does is operate, by cable, the flaps back on the heat exchangers that allow or retard the hot air to / from flow(ing) forward into the passenger cab. The lever nearest to you opens and closes the hot air vents under the back seat, again by cable.
Theoretically, when these rear vents are closed (lever down), the hot air coming from the heater boxes is forced forward to the front of the passenger cabin, up to the floor vents under the doors and, again "theoretically", up to the defroster vents.
The manual recommends that, upon first starting and then driving the car, you ought to leave the rear vents closed to allow maximum heating to the front of the cabin. This you do with only the lever closest to the passenger seat up. Once the front of the car has adequately "defrosted", then the rear vents can be opened as well to ensure even heat circulation through out the car.
In reality, this only sort of, kind of works. The amount of hot air being pumped into the cabin is, of course, dependent upon the RPM's of the engine. The faster the engine is turning over, the faster the fan turns, etc.
There where / are after-market kits that had / are intended to assist the heating system and make it less anemic. One has to be cautious about what sort of kits one invests in, because many are pure bunk and don't work. Volkswagen had, for some time, offered gasoline powered heaters that were mounted behind the dash, atop the gas tank, but as they were largely unsafe, they were discontinued.
I'm not certain how cold it gets during Australian winters, but I think that even the anemic nature of the old VW heating system might be adequate for your general climate.