A Christmas party provided to your employees can be a minor benefit and therefore exempt from fringe benefit tax. This is only if certain conditions are met, such as the cost of the party being under $300 per employee.
If the benefit is provided to an associate of the employee, such as a partner or family, it may also be a minor benefit and exempt from fringe benefit tax if the cost of the party for each associate is less than $300.
Also, the threshold of $300 per employee applies to each benefit provided, not to the whole value of the Christmas party. This means you may be able to give your employees a Christmas gift at the party and still be exempt from FBT. You just need to stay under $300 for each benefit.
However, remember that costs incurred with providing a Christmas party are only tax deductable to the extent it is subject to fringe benefit tax. If you fall into the above exemptions, the Christmas party cannot be claimed as an income tax deduction.