ATO plays Scrooge at Christmas, of course

Christmas parties are usually either not tax deductible as "entertainment" or there can be Fringe Benefits Tax payable.

The only way to make a Christmas party tax deductible is to put on what could be considered an underwhelming event: the party would need to be held on business premises with only employees and or clients in attendance and only finger food or light meals could be served. Also, definitely no alcoholic beverages. 

The situation is better with staff Christmas gifts. As long as the value of the gift is under $300 (including GST) per employee and does not constitute "entertainment" a tax deduction is allowable and a GST refund can be claimed, if applicable. Hampers, wine, gift vouchers are fine. Movie or concert tickets, restaurant meals and holidays are classed as entertainment and so are not tax deductible.