You could possibly hone the wheel cylinders and fit new cups but brakes on these cars are prone to water based damage if the cars are only used infrequently.
Best bet is stainless sleeves. I've used these guys in the past and they are cheap and top notch work.
http://www.powerbrakes.com.au/Just send them your parts and they refurbish and return.
There are a few reasons why it could be locking up. Oil on the linings, out of round drums, wrongly adjusted shoes, and sticking wheel cylinders are a few possible culprits.
As for brake fluid, anything name brand off the shelf at your local auto parts will be OK.
Post some pictures of your car if you can. I noticed that you are from Broken Hill. Is your car a local one? Must be still a few good ones out in the far west of NSW.
