"Lamingtons are a traditional Australian snack. They are usually small portions of cake which is chocolate coated with coconut, but these ones are Christmas themed! These are traditionally baked in a 31x25-centimeter Lamington tray. Use any food colors you like to tint the icing."
Beat sugar and 1/2 cup plus 1 3/4 teaspoons butter together in a bowl with an electric mixer until light and fluffy. Add eggs 1 at a time, beating well after each addition.
Sift flour and salt together in a bowl. Add flour mixture and milk alternately to the sugar-butter mixture. Add 1/2 teaspoon vanilla extract. Mix until just combined. Add additional milk, 1 teaspoon at a time, to form a soft batter. Spread batter evenly into a shallow 10x14-inch baking pan.
Bake in the preheated oven until golden brown, 25 to 35 minutes.
Turn cake out onto a rack to cool, at least 10 minutes. Cut into 30 squares.
Place dried coconut in a bowl. Combine 3 cups confectioners' sugar, 1 tablespoon boiling water, and 2 tablespoons butter in a separate bowl. Add more boiling water, 1 tablespoon at a time, until icing is fairly runny. Stir in 1/2 teaspoon vanilla extract and red food coloring.
Line a tray with waxed paper. Pick up a cake square using a fork and coat it in the icing. Allow excess icing to drip off. Coat the cake in coconut; place on the prepared tray. Repeat with remaining cake squares. Allow icing to set for 30 minutes at room temperature before serving.