You can take most major currencies in cash, recommended being euro, British pounds, or American dollars. You cannot change Australian dollars.
I recommend that you take a bit of cash for emergency, but use an ATM card to actually get at your money. Best to take a VISA or MasterCard debit card, and get cash advances from ATMs, which are available in most cities of Madagascar. All banks accept VISA, only the BNI bank accepts MasterCard. Note that you cannot pay for goods or services in shops or hotels with your card, you can only get cash from an ATM. Please note that your card must be visa or mastercard, other cards do not work at all in Madagascar. almost 5 years ago