retrofitting wall insulation in a fibro house

Hi, just wanted to bounce some ideas and check that am on the right track.
It's a fibro house in Canberra that has condensation and thus mould issues on the external walls in winter when heated, not too mention thats it's still bl**dy cold anyway. Due to a myriad of reasons we've decided no to reclad the exterior, and instead, are room by room, replacing the old fiberous plaster on the ext walls, insulating and adding dbl glazed windows as we go.

Now, I'm thinking will install a breather wrap against the fibro and tape seal it to the studs in each bay. Then batts, then plasterboard.

The question is should i have an air gap between the wrap and the batts? (just standard glass wool batts). If so, would i just use some runs of string to hold the batts back, and presumably the batts could only be R1.5 then as i have 100mm studs.
Also, (and I'm hoping oldbloss might help me here), being fibro construction and in Canberra do i need to put anything extra in walls like additional reflective foil between the batts and the plasterboard to better keep the heat in the rooms or is that overkill?

thanks for reading my waffle; if you have any other ideas or have done this before please tell...:U


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