I am not familiar with the white-lined spider sponge, and I suspect that’s the species that is not often available to hobbyists here in the US.
Most sponges are perfectly safe to use with seahorses in the aquarium, although they are often very difficult to keep alive and healthy. Live sponges normally do best in well-established reef tanks.
Also, you should be aware that many sponges contain toxins and incorporate glassy spicules into their fibrous bodies, presumably in order to deter fish predators. (Many marine angelfish love to graze on sponges, and in some species sponges comprise the bulk of their diet.) But, as a rule, this never causes any problems in a seahorse tank because it’s entirely a passive defense mechanism — the sponges have to be attacked and torn open in order to release the toxins and that just never happens under normal aquarium conditions. But should the sponge be damaged and the toxins released, it could be harmful for the aquarium residents.
For instance, I know of one case in which a hobbyist had such a problem when he attempted to clean up a live sponge that had been overgrown with hair algae. In order to prevent the sponge from being smothered by the algae, he resorted to trimming off pieces of the sponge and scraping some areas with a knife in order to remove the hair algae, which was evidently sufficient to release the toxins in its tissues, because his protein skimmer immediately went nuts and begin producing copious amounts of wet foam and his pair of seahorses went into convulsions and died within a day.
That incident was the first time I’ve ever heard of such a problem, so such experiences are likely very rare events. I would check with the reef keepers in Australia to see what they would recommend regarding the white-lined spider sponge, Toni.
Best wishes with all your fishes, Toni!