People often get very confused about tax deductions, many think that if you can claim something as a tax deduction you get the whole lot back in tax, effectively meaning you get that item for free.

This is not how it works. If a thing is tax deductible (on the grounds that it is an allowable business expense, investment expense or otherwise) then all this allows you to do is take this off the amount of taxable income you declare, and thus you don't pay tax on that amount of income.

Income is taxed at marginal tax rates, so reducing your income saves you tax equal to the expenditure times your top marginal tax rate.  The highest marginal tax rate in Australia at the moment is 46.5%, so a high income person can effectively reduce the cost of deductible items, or the size of any income losses, by only 46.5%. 

Getting something for up to 46.5% off is nice, but if you don't need something it still costs you money. I hear all the time about people rushing out and buying mobile phones and computers and coffee machines because they may be tax deductible for their own business, but they aren't getting something for nothing, at best they are just getting it at a discount.  I've even heard of a mortgage broker telling someone to get a high interest rate loan because this owuld give them a bigger tax deduction.

A tax rebate is something else. Instead of deducting money from your assessable income this comes right off the final tax bill. You get a 100% benefit.

Rebates include franking credits, the government's 30% rebate on the cost of private health insurance, the rebates given for certain superannuation contributions, the rebate on superannuation pensions, beneficiary rebate for social security recipients and many others.