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.

ie A man earns a $48,000 salary but claims $4,000 for a loss on a negatively geared property and $2,000 self education expenses. Here is his tax calculation before and after these deductions.

Just ignoring the Medicare Levy and other complications for now, his $48,000 salary puts him in the $20,001 - $50,000 tax bracket, which would mean his marginal tax rate is 30% for any income over $20,000. He pays $2,380 on the first $20,000 of taxable income and then 30% x $28,000 = $8,400, so his total tax bill will be $10,780.

With these allowable deductions, his income is $48,000 - $4,000 - $2,000 = $42,000. He's still in the same tax bracket so the amount of tax he pays is $2,380 + 30% x $22,000 = $2,380 + $6,600 = $8,980.

So the taxpayer spent $6,000 and saved $1,800 in tax, and you'll note that $6,000 x 30% = $1,800. So it is not as if the "tax man" went to foot the bill for his entire shortfall, and he got his education for free, all he got was a 30% discount, the same as his tax rate. If he was on a 47% tax rate he would save 47%, but under no circumstances will a tax deduction allow him to get something for free, we don't have a 100% tax rate.

Getting something for 30% or 47% 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.

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.

For example, another tax payer receives a $40,000 salary and also qualifies for a $540 rebate for contributing $3,000 into her non-working spouse's superannuation (a spouse superannuation contributions rebate).

Her tax bill will be calculated in the usual way, $2,380 for the first $20,000 and then 30% for the next $20,000, which means she would pay $2,380 + $6,000 = $8,380 tax. Then a $540 rebate is applied and thus the final tax bill will be $7,840. A $540 rebate is much better than a $540 deduction, the deduction would only have given her a benefit of $162. To get the same benefit as a $540 rebate the taxpayer would have to get an $1,800 tax deduction.