Are R rated games allowed in Australia now

Currently NO....but there are a lot of people fighting for this to happen in the not too distant future. Since Michael Atkinson recently decided to leave his job as Attorney General in South Australia (he being the major voice against R18 rating) it's looking very possible we will get the R18 rating soon. If you want to know more about this check Game Informer Magazine (auastralian edition) or their website as they are fighting very hard for this issue to become a reality.
and if you want to write a letter, make it to Robert McClelland because he is the present attorney general