Tax breaks lauded for boosting IT projects

Analysts and resellers claim the Federal Government's stimulus package is responsible for keeping sales ticking over during the economic crisis.

Earlier this year, Labor announced a number of initiatives to give the Australian economy a boost. One of these included a tax break for businesses (with less than $2 million turnover a year or less) to purchase and install technology before 30 June.

Ian Grieve, owner of Queensland-based reseller Computer Ambulance told CRN that his small business customers bought up big to take advantage of the breaks.

He said that even beyond the expiry of the tax breaks, customers have kept the purchasing momentum going.

"We're now in September and I'm still getting requests for new IT projects," he said. "There is certainly confidence in IT purchases in regional areas."

The Government's  financial stimulus plan also allowed Australia to shrug off the decline in server shipments, said analyst firm Gartner.

The analyst group has published a report on worldwide market share for server vendors for the second quarter of 2009, which shows a steep decline in revenue for the global server market. In the second quarter of 2009, Asia-Pacific experienced a 17.2 per cent year-on-year decline in server shipments, while server vendor revenue was also down 15 percent over the same period to $US1.71 billion.

Erica Gadjuli, principal research analyst at Gartner told, CRN, the Australian Government's stimulus plan allowed Australia to buck the trend and record a revenue decline of just 2.5 per cent.

It "expected Australia's stimulus plan" would "continue to benefit the server market", with improved business confidence further driving demand in the second half of the calendar year, said Gadjuli.

"Gartner is forecasting that server spending in Australia will slowly be showing positive growth again in 2010," she said. "This is mainly because businesses are currently continuing to be cautious in their investment."

Chris Herrmann, managing director of Sydney-based integrator Far Edge Technology told CRN that Gartner's research correlates with growth in server purchases by its customers.

He said the integrator had received requests for server products from smaller organisations with around ten staff.

"These guys are more interested in purchasing virtualisation products," he said. "They will purchase one server, which they can replicate."

Herrmann said the Government's stimulus package helped spur a rush of jobs towards the end of June.

"Interestingly enough we've had more ongoing work," said Herrmann. "Although the tax breaks were cut off on 30 June, I believe it helped customers to get into the headspace of thinking about IT projects.

What do you think? Did the Government's stimulus package help your customers purchase servers or any other technology?