My sister faced this with my nephew who was born in Feb, difference being in NSW we do the once a year intake, so it was a matter of whether to hold him back an entire year or not.
She held him back, and honestly, it was the best thing she could have done. He really wasn't ready for school at 4 turning 5 and would have really struggled. When she sent him the following year, he has really shined, and is doing really well in school. From what my sister said, he hasn't had any problems with kids noticing he's that bit older as the cut off is the beginning of July.
On the flip side, my mother had this decision with my brother when he was starting school, (he's 34) back then the cut off age was different, and his birthday is the beginning of July. My mum sent him to school when he was 4.5, and he ended up struggling through most of his school life and needing constant tuition, as well as having to repeat a year, and she says she regrets not holding him back.

If you think it's best for her, then go with it, you know your children better than others