Sponge Cake in "True Blue" by John Williamson
"Sponge cake" could well be an allusion to small, significant commodities that which can be mass produced and discarded like a Lamingtons. The words "sponge cake", here could have a similar meaning to the British usage of "trifles" when referring to trivial items.
There's no record of the recipe of Lamingtons being sold; this website purports to contain a recipe dating back to 1900: https://trove.nla.gov.au/newspaper/article/101452826
The reference to "sponge cake" is most likely included to provide a syllable sound similar to "smoko", "cockatoo" and Dinkum". These sounds are not intended to rhyme, but to provide a mild stress on the syllable during the song's delivery.
He's referring to our politicians selling out our country to foreign interests like China, which they are.