Can I take fudge that has been produced in Guernsey (Channel Islands) into Australia together with my personal luggage?
When you arrive you MUST declare all the food you are carrying. The Australian officials will then either confiscate it or let it in. (I think you can also arrange to ship it home or leave it at the airport for you to take home when you go.) You will only get into trouble if you try to sneak something in without declaring it. They have sniffer dogs and other ways of knowing what you're carrying. So if the fudge is bought and you're on your way, just tell them about it on arrival and get a decision made there.
Now, if you're trying to decide whether to buy it, or if you have time to eat it rather than see it confiscated, you need to check out the Australian government web page on what you can bring in. It list things you must declare, but that may be returned to you (that is, not confiscated). Your fudge absolutely must be declared. It seems, though, that it explicitly will be allowed in, according to another government page:
Confectionery (excluding Indian milk-based desserts and sweets) is allowed into Australia. Confectionery includes chocolate, fudge, toffees, boiled sweets, peppermints, marshmallows and liquorice etc. It does not include liquid dairy desserts, spreads or drinks, which are covered under the Dairy items heading.
[emphasis mine]. But remember, being allowed doesn't mean don't declare it. It means declare it, let them look at it, and thank them when they allow you to keep it.