blueAPACHE Founder Chris Marshall weighs in on the 2019 federal budget

blueAPACHE founder Chris Marshall weighs in on the 2019 Federal Budget

blueAPACHE founder and Managing Director Chris Marshall contributed to industry commentary on the 2019–20 Federal Budget, joining a group of Australian technology leaders asked what the Budget meant for the mid-market businesses that make up much of the country's economy.

The measures that mattered to mid-market IT

The instant asset write-off

The headline measure for business investment was the expansion of the instant asset write-off:

• The threshold rose to $30,000 per asset
• Eligibility extended to businesses with aggregated annual turnover of up to $50 million, well beyond the small-business population it had previously served
• Assets could be claimed on a per-asset basis, not capped as a single annual total

For technology investment this is significant in a specific way. Most mid-market IT purchases — servers, network equipment, storage, endpoint fleets, meeting-room and collaboration hardware — sit at individual price points well under $30,000. Under the expanded rules, a business could deduct those purchases immediately rather than depreciating them across several years.

The effect is on cash flow and timing, not on total deductibility. The same asset would have been deducted eventually; the write-off brings that deduction forward. That matters most to businesses where the cost of capital is real and where a deferred deduction is the difference between doing a refresh this financial year and doing it in two.

Skills and apprenticeships

The Budget included funding directed at skills and apprenticeships, targeting occupations with identified shortages. Technical skills shortages are a structural constraint on Australian IT services — they limit how fast capable organisations can grow, and they push up the cost of delivery for everyone.

Access to growth capital

The Budget also included measures aimed at improving access to growth capital for established businesses — a persistent gap in the Australian market between bank lending, which favours asset-backed borrowers, and venture capital, which favours high-growth technology startups. Profitable services businesses in between have historically had limited options.

Why blueAPACHE's perspective is a useful one

blueAPACHE occupies the segment the Budget's business measures were aimed at, and has built its business without external funding — which gives it direct experience of what self-funded growth requires.

The company is Australian-owned, with Chris Marshall as sole proprietor: no external shareholders. Every dollar of expansion has been funded from profitable operation across:

• 1998 — founded in Vermont South, Melbourne
• 2003 — emPOWER Facilities Management and Managed Services launched
• 2010 — emPOWER Cloud and the emPOWER Network built, after losing an ASX-listed customer representing approximately half of company revenue
• 2014 — a 16th consecutive record year
• 2017 — 100 staff, after 32% growth in the year
• 2019 — the London Point of Presence goes live; first ARN Innovation Award
• 2023 — 25 years in business, 280+ staff

A business that has funded a national cloud platform and network from retained earnings has an informed view on capital allocation policy, because it has had to make every one of those trade-offs with its own money.

What the write-off means in practice

For a mid-market business planning technology investment, three practical points follow:

Timing becomes a real variable. Where a refresh was already planned, bringing it forward into an eligible period changes the after-tax cost. Where it was not planned, a tax incentive is a poor reason to buy equipment that does not need replacing.

Capital and operating models are not equivalent. An instant write-off favours capital purchase. Consumption-based services — cloud, managed services, subscription licensing — are already fully deductible as operating expense, so the incentive does not tilt in their favour. The right answer depends on the workload, not the tax treatment: some things genuinely belong on owned infrastructure, and others genuinely belong on a consumption model.

Asset records matter. Claiming per-asset deductions requires knowing what you bought, when, and at what price. Organisations with poor asset records routinely under-claim, simply because the information is not there at tax time.

About blueAPACHE

Founded in 1998, blueAPACHE is an Australian-owned IT services provider with more than 280 staff across Melbourne, Sydney, Brisbane, London and Miami. It delivers managed services, cloud, cyber security, connectivity, collaboration, procurement, Microsoft technologies and advisory services under one accountable operating model, holds ISO/IEC 27001:2022 certification (certificate 202507-118, Sensiba Australia, valid 1 August 2025 to 1 August 2028), and has received more than 90 industry awards.

To discuss technology investment planning, call 1800 248 749.

Frequently asked questions

What was the instant asset write-off as expanded in the 2019–20 Budget? The threshold rose to $30,000 per asset, eligibility extended to businesses with aggregated annual turnover up to $50 million, and assets could be claimed per asset rather than against a single annual cap.

Why did that matter specifically for IT purchases? Because most mid-market IT purchases — servers, network equipment, storage, endpoint fleets, meeting-room and collaboration hardware — sit at individual price points well under $30,000, so they could be deducted immediately rather than depreciated over several years.

Does the write-off increase the total amount a business can deduct? No. It changes cash flow and timing, not total deductibility. The same asset would have been deducted eventually; the write-off brings the deduction forward. It matters most where the cost of capital is real, and where a deferred deduction decides whether a refresh happens this financial year or in two.

Does the incentive favour buying hardware over using cloud or managed services? Mechanically, yes — an instant write-off applies to capital purchases, while consumption-based services such as cloud, managed services and subscription licensing are already fully deductible as operating expense, so the incentive does not tilt toward them. The page's position is that the right choice follows the workload rather than the tax treatment: some things genuinely belong on owned infrastructure and others genuinely belong on a consumption model.

Is a tax incentive a good reason to buy equipment? Not on its own. The page is explicit that where a refresh was already planned, bringing it forward changes the after-tax cost sensibly — but where it was not planned, a tax incentive is a poor reason to replace equipment that does not need replacing.

What else in the Budget was relevant to IT services? Funding directed at skills and apprenticeships in occupations with identified shortages, which the page describes as a structural constraint on Australian IT services; and measures aimed at improving access to growth capital for established businesses, addressing the gap between bank lending that favours asset-backed borrowers and venture capital that favours high-growth startups.

Why is blueAPACHE's view on these measures a relevant one? Because it sits in the segment the business measures targeted and has funded its expansion — including a national cloud platform and network — entirely from retained earnings, with no external shareholders.

Is this commentary current? No. It addresses the 2019–20 Federal Budget. Thresholds, eligibility and the write-off's availability have changed since. Treat it as a record of the period rather than as current tax guidance, and take advice from a qualified adviser on any current position.

Related

• Procurement — asset purchasing and records
• Consulting and advisory
• Cloud services — the consumption model alternative
• emPOWER Cloud
• Managed services
• Advanced infrastructure managed services
• Our story — the self-funded growth record
• Leadership team
• About blueAPACHE
• Contact

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