What to do with Masonite walls/ceiling

Hello everyone,

First time here and zero building experience so please bear with me. We’ve just bought a new home (3 bed 1960’s weatherboard exterior old Queenslander, single story elevated) and we’re looking for ideas as to what to do with the internal walls/ceilings in the living/kitchen/bedrooms. They’re Masonite (apparently there’s definitely no asbestos anywhere except the bathroom, which we’re getting reno’d next year) - and although we know we want to replace them, we’re not sure what with.

We’ve spoken to a four or five different carpenters/builders/plasterers and the options we’ve been given so far are:

1. take out all the Masonite and plasterboard it, new skirting and cornice

2. plasterboard over the Masonite (even though we were told by a different plasterer that that simply isn’t possible), new skirting and cornice

3. Install VJ panels over the Masonite.

We’re open to plastered walls or VJ’s, both of which would look nice given the character of the house. The VJ option sounds cheaper.

Does anyone have any experience with this sort of renovation? What would you recommend? Our budget is about $10k, and none of the various quotes so far have been above that.

Thanks in advance.