I don't think that's the case, at least if you are also a Canadian citizen. I checked with the people in Swansea and can drive on my Canadian licence for up to a year.

You may be right. I wanted to exchange my US car license for a UK license ~5 years ago and I was told by DVLA that, not only could I not exchange it but I couldn't use it in the UK for the customary 12 months (to complicate matters, I had a UK motorcycle license, but not a car license ). Checking there website now, I don't see any mention of that, so it could've been misinformation (best to check again with DVLA):

http://www.direct.gov.uk/en/Motoring...nce/DG_4022562

The rules for commonewealth and non-commonwealth citizens are different I believe.

Citizenship is irrelevant. The rules for driving in Great Britain on a non-GB licence are here:

http://www.direct.gov.uk/en/Motoring...ence/index.htm
http://www.direct.gov.uk/en/Diol1/Mo...rive_in_gb.dsb

The OP's son will be able to exchange his Australian licence for a GB one, since Australia is a designated country:

http://www.direct.gov.uk/en/Diol1/Mo...ng_licence.dsb

I only hold a US license ...I'm a Brit and I checked with the DVLA ,its fine for me to drive on it!

For one year though,then I must re-take the test!