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Electric incentives...the sequel · The Money Puzzle

0:10
Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm
0:14
Speaker 1: James Kirby. Welcome aboard. You know, one of the most
0:17
Speaker 1: popular shows we've had so far this year completely surprise me.
0:23
Speaker 1: You might have heard the episode we did on incentives right,
0:27
Speaker 1: Electric incentives we call that show, which was all the
0:30
Speaker 1: incentives that are available for you in relation to clean
0:35
Speaker 1: energy wherever you are in your home or in your car,
0:39
Speaker 1: and it was with James Girard. I've had a lot
0:42
Speaker 1: of questions after the show, and so we have to
0:46
Speaker 1: have him on again because there's a lot more to
0:48
Speaker 1: talk about. But just before we do, I also want
0:51
Speaker 1: to talk to James about super tax because I've had
0:53
Speaker 1: a fe lot of questions about that too. So let's
0:55
Speaker 1: do the two. We'll just get the super tax and
0:57
Speaker 1: we'll just bring people up to speed as too we are,
1:00
Speaker 1: and then we will talk about electric incentives the sequel.
1:05
Speaker 1: How are you, James.
1:07
Speaker 2: I'm doing well. Thank you, James. Good to be on
1:09
Speaker 2: the show today.
1:10
Speaker 1: Telling me what's the latest on the supertax you're reading.
1:14
Speaker 2: It's been dragging on for a while. It was introduced
1:17
Speaker 2: to Parliament twelve months ago and it's in the Senate
1:20
Speaker 2: and it looks like the Labor is pretty close to
1:23
Speaker 2: doing a deal with the Greens in the cross benches,
1:25
Speaker 2: so it's likely to come through as legislation in the
1:29
Speaker 2: near future.
1:29
Speaker 1: Right, because in effect it starts on July one, right,
1:34
Speaker 1: I mean, in theory it starts on July one, twenty
1:37
Speaker 1: twenty five. But they're basically what you The period in
1:41
Speaker 1: which the tax supplies for which the revenue is collected
1:44
Speaker 1: begins on July one, which is a couple of weeks away,
1:47
Speaker 1: so I'm not surprised they're rushing to do a deed.
1:49
Speaker 1: I think the Greens sound like, well, you know, according
1:52
Speaker 1: to the papers, one of which is The Australian, and
1:56
Speaker 1: I would take it pretty seriously because they're very plugged
1:58
Speaker 1: in at that level. The Coalition won't be doing a
2:02
Speaker 1: deal with Labor on this tax, the Greens will, and
2:07
Speaker 1: the Greens it would seem shell shock, perhaps from the
2:10
Speaker 1: negative reaction to how they objected to just about everything
2:13
Speaker 1: that went into Parliament in the last parliament, seemed to
2:17
Speaker 1: be agreeable towards the bulk of for Jim Chalmers plans.
2:23
Speaker 1: So today's reading all the folks is a it's going
2:26
Speaker 1: to happen. B it's going to include on realized games. Yes,
2:29
Speaker 1: believe it or not, a whole damn thing is going
2:31
Speaker 1: to happen and all the consequences, which we'll cover as
2:34
Speaker 1: we go. And it may not be indexed. The Greens
2:38
Speaker 1: aren't even pushing for that anymore, which is what they
2:41
Speaker 1: were asking for. They were asking for it to be
2:43
Speaker 1: indexed and to be brought down to two million, but
2:45
Speaker 1: none of that might come to pass as we speak
2:47
Speaker 1: this morning. So look a just a couple of quick
2:50
Speaker 1: ones on that tax. James, now that you're here, before
2:54
Speaker 1: we talk about the electric incentives and everything else that
2:57
Speaker 1: came from that first show, asks why is the government
3:02
Speaker 1: constantly thinking about tax Why don't they ever consider some savings? Well,
3:06
Speaker 1: just quickly rambish, they don't. Actually, this government has not
3:13
Speaker 1: particularly focused on bringing in new revenue. And the big one,
3:17
Speaker 1: the big ticket item, is the super tax. Two point
3:22
Speaker 1: three billion a year is the alleged total which they
3:26
Speaker 1: will raise from this, and that is the reason I
3:30
Speaker 1: think that they have brought in this tax. They haven't
3:34
Speaker 1: actually brought in many other taxes. In fact, they've cut them.
3:39
Speaker 1: Maybe think about the personal income tax. I just hot
3:42
Speaker 1: through these pretty quickly, Tom asks, I have a quirky
3:45
Speaker 1: question in regards to this on realized gains. I think
3:48
Speaker 1: I know the answer, But could you theoretically go bankrupt
3:53
Speaker 1: for a debt to the ATO on realize gains on
3:57
Speaker 1: realized gains in your super? Okay, Tom asked, Gems, could
4:01
Speaker 1: you go bankrupt on the basis of the tax you
4:06
Speaker 1: were hit with? I was thinking about this. I can't
4:09
Speaker 1: see how you could because you'd have three million in super.
4:11
Speaker 1: Would you tell me?
4:13
Speaker 2: Yeah, I think it's potentially possible. Reading the legislation Division
4:18
Speaker 2: two ninety six, tax is levied to the individual, so
4:22
Speaker 2: the individual will get a bill from the tax office.
4:25
Speaker 2: And if the individual has no money to pay, if
4:28
Speaker 2: the SMSF for the superinnuation account has lumpy assets in
4:32
Speaker 2: it that can't be liquidated for whatever reason, well then
4:35
Speaker 2: the tax office is going to go after you, just
4:38
Speaker 2: like they would with any other DEBTA, and that could
4:41
Speaker 2: progress through to legal action, which could be bankruptcy proceedings.
4:45
Speaker 1: We're not a tabloid here, so let's just say, what
4:49
Speaker 1: would you think are the probabilities of that happening? A
4:52
Speaker 1: thousand to one, A million to one.
4:55
Speaker 2: Look, so you just have to think about the circumstances
4:59
Speaker 2: that could create that event to occur with the bankruptcy.
5:02
Speaker 2: So one, there needs to be an asset there or
5:04
Speaker 2: a superannuation balance of more than three million dollars, and
5:07
Speaker 2: then there needs to be circumstances where that asset can't
5:10
Speaker 2: be sold. Most assets in superannuation funds, even if they're
5:14
Speaker 2: property based assets, they can be sold at some stage.
5:16
Speaker 2: So it'd have to be something quite unique, such as
5:18
Speaker 2: a closed ended investment trust that maybe has like a
5:21
Speaker 2: ten or fifteen year term and there's no liquidity or
5:24
Speaker 2: redemption windows within that.
5:26
Speaker 1: You had all your three million super in.
5:28
Speaker 2: It, exactly. Yeah, it'd have to be something quite niche.
5:31
Speaker 1: And a lot of the chances of someone having.
5:33
Speaker 2: That it's relatively low. You have to be quite a
5:38
Speaker 2: high risk taker to throw more than three million.
5:40
Speaker 1: Yeah, come on, put a number on it. Give us
5:44
Speaker 1: a number, just tell the audience.
5:46
Speaker 2: Sure, that's a less than one percent. You'll be talking
5:50
Speaker 2: like one in a thousand and one in ten thousand
5:52
Speaker 2: type thing.
5:53
Speaker 1: Yeah, I'd say it's what a ten thousand door higher.
5:57
Speaker 1: In fact, I would put it way way higher. But
6:00
Speaker 1: you know, Tom, it's a great question. And if we
6:02
Speaker 1: were the type we could get outraged about that, but
6:04
Speaker 1: we only get outraged about things that matter, and we
6:07
Speaker 1: are outraged enough about the super without coming up with
6:10
Speaker 1: extraordinary arcane theoretical things. There's enough to worry about in
6:14
Speaker 1: practice with this damn stupid, daft ungainly tax that is
6:20
Speaker 1: silly in so many ways, and not because it's on
6:22
Speaker 1: the three million mark, but because of the nature of
6:26
Speaker 1: the exercise and the technique of which they are taxing. Okay,
6:29
Speaker 1: I think that will do on the super tax, James,
6:31
Speaker 1: because there's so much we wanted to talk about with
6:34
Speaker 1: the electric incentives, and there's such demand public demand out
6:37
Speaker 1: there from our listeners. Would you, just before we get
6:41
Speaker 1: into the questions, briefly explain once more what you said
6:47
Speaker 1: in the first show about what's available to you, for instance,
6:51
Speaker 1: as a homeowner and briefly what's available to you as
6:55
Speaker 1: a car owner in terms of the incentives available out
6:59
Speaker 1: there for anyone in Australia anywhere at any level to
7:04
Speaker 1: basically go clean energy.
7:07
Speaker 2: Sure thing. So for the home at the moment, the
7:10
Speaker 2: government does subsidize the cost of solar systems to be installed.
7:16
Speaker 2: It's a few thousand dollars there are state incentives as well,
7:20
Speaker 2: but as one of the election promises, Labor came out
7:23
Speaker 2: and said, we'll add thirty percent extra reduction in the
7:27
Speaker 2: cost of these solar systems, which is quite significant. And
7:31
Speaker 2: when you stack the state government and the federal government rebates,
7:34
Speaker 2: in a lot of cases it can halve the cost
7:37
Speaker 2: of the system. And so I should clarify we're talking
7:40
Speaker 2: about home batteries. I'm saying they're issuing that new thirty
7:43
Speaker 2: percent rebate.
7:44
Speaker 1: You made the point that more than three homes I
7:46
Speaker 1: think had solar but only one in only a fraction
7:50
Speaker 1: of those homes had batteries, which is what would really
7:53
Speaker 1: make the whole thing come to that.
7:55
Speaker 2: That's correct, Yeah, and that comes down to I think
7:57
Speaker 2: when most people crunch the Excel spread sheet, they see
8:00
Speaker 2: that the payback period is usually a give or take,
8:03
Speaker 2: but about five years for a rooftop solar system, but
8:06
Speaker 2: the battery can be closer to ten years for that
8:08
Speaker 2: financial payback period. And as such, more people have the
8:11
Speaker 2: solar panels, but they don't have the home battery. Although
8:14
Speaker 2: in conversations over barbecues, a lot of people want to
8:17
Speaker 2: get the home batteries, but they're waiting for the technology
8:20
Speaker 2: to catch up and get to that point where that
8:23
Speaker 2: the costs come down and the payback period is lesser.
8:26
Speaker 2: So federal government labor have promised to thirty percent reduction
8:30
Speaker 2: in the cost of the home batteries. And that's a
8:34
Speaker 2: great thing. Now, So when I requnch the numbers, when
8:37
Speaker 2: you add this new rebate there, it gets more compelling.
8:40
Speaker 2: It's not amazing, but it's more compelling to put the
8:43
Speaker 2: home battery in. So I'm assuming that battery installers are
8:47
Speaker 2: going to be run off their feet later this year
8:50
Speaker 2: as this thing starts.
8:51
Speaker 1: Boom business, I know, the boom business created by the
8:54
Speaker 1: targeted incentives of the Albanese administration. Oh key, and those
8:58
Speaker 1: the barbecue conversations are over gas barbecues or even collar
9:04
Speaker 1: cues either sort of barbecues. I'm not sure. I don't know.
9:08
Speaker 1: I'm hopeless on anything robotely technical. Okay, now very briefly too.
9:13
Speaker 1: On the electric car. What was the incentive available on
9:19
Speaker 1: electric cars that our listeners may not know.
9:23
Speaker 2: The history is that there's always been a scene callednovated
9:26
Speaker 2: leasing where you can salary package vehicles and the way
9:29
Speaker 2: that it works is that you use part of your
9:32
Speaker 2: pre tax income part of your post tax income, and
9:35
Speaker 2: it's usually a fifty to fifty split to be able
9:37
Speaker 2: to fund a motor vehicle as part of your work package.
9:41
Speaker 2: And you do it part pre tax, part post tax,
9:43
Speaker 2: so basically you don't pay fringe benefits tax. Now, a
9:47
Speaker 2: couple of years ago, the federal government said that if
9:50
Speaker 2: you purchase an electric vehicle, you don't have to worry
9:53
Speaker 2: about this pre tax post tax thing will allow you
9:55
Speaker 2: to use.
9:56
Speaker 1: You lease an electric vehicle.
9:57
Speaker 2: You lease an electric vehicle, yeah, and at the end
10:00
Speaker 2: you do have the option to buy the electric vehicle.
10:03
Speaker 2: So although the word is least, for all intents and purposes,
10:05
Speaker 2: it's your vehicle. You take ownership of it, you wash it,
10:08
Speaker 2: you look after it, and then at the end it's
10:10
Speaker 2: either sold and if there's any difference on the least contract,
10:13
Speaker 2: you have to pay that out or you get cash
10:15
Speaker 2: back if the lease residual is less than the payment
10:18
Speaker 2: amount that you get for the car. So there's always
10:21
Speaker 2: been in place, and the federal government said that we
10:23
Speaker 2: want more electric vehicles on the road. So if you
10:26
Speaker 2: buy a brand new electric vehicle through this novated leasing scheme,
10:30
Speaker 2: you don't have to use any of your post tax income.
10:33
Speaker 2: You can use one hundred percent of your pre tax
10:35
Speaker 2: income to fund the vehicle. And now this is one
10:38
Speaker 2: of the best tax breaks going around for high income
10:40
Speaker 2: earners using their pre tax income to fund not just
10:44
Speaker 2: the financing cost, but the ongoing operational cost of a
10:47
Speaker 2: motor vehicle as well. So that's why it's costed the
10:50
Speaker 2: government so much money over the past few years since
10:52
Speaker 2: this scheme has started.
10:53
Speaker 1: Terrific So very simply Patrick, cars find a half deductible
11:01
Speaker 1: against your income. But electric cars are one hundred percent
11:05
Speaker 1: if you use an ovated lease standard least package. Yeah,
11:09
Speaker 1: and that's why those that area is booming really interesting
11:11
Speaker 1: and explains to some degree the sudden appearance of electric
11:16
Speaker 1: youth all over the place. They are still youths, but
11:20
Speaker 1: they're not as noisy. They seem to be cleaner too,
11:22
Speaker 1: for some reason, I don't know why. All right, Okay,
11:25
Speaker 1: we've got some great questions from our listeners. We'll take
11:29
Speaker 1: a short break and we'll be back. Hello, Welcome back
11:42
Speaker 1: to The Australian's Money Puzzle. James Kirby here with James Gerard. James,
11:46
Speaker 1: can you see the questions? I'll read the first one
11:49
Speaker 1: with David says on that electric car leasing, at the
11:53
Speaker 1: end of the lease, do I hand the old clapped
11:55
Speaker 1: out one back and list a new one who carries
11:59
Speaker 1: the cost of the policy issue use the electric cars
12:02
Speaker 1: to not appear to have much value. This is a
12:04
Speaker 1: great question, David, and it's why I did say. I
12:07
Speaker 1: have said regularly on the show, you're going to get
12:09
Speaker 1: an electric car, release it because in five years, I
12:13
Speaker 1: mean the technology change in five years and electric cars,
12:16
Speaker 1: the five year old electric car is going to look
12:18
Speaker 1: like an antique I reckon in five years time. You
12:21
Speaker 1: think about what's happened in the last couple of years,
12:23
Speaker 1: the charging, for instance, the rapid charging, etc. But so
12:28
Speaker 1: the first part is does he hand it back or
12:31
Speaker 1: lease a new one? That's up to him, isn't it really?
12:34
Speaker 2: It is when you take out these electric car novated leases,
12:38
Speaker 2: you get to choose how long, so one year up
12:41
Speaker 2: to five years are the typical timeframes, and also how
12:44
Speaker 2: much of that lease do you want left at the end,
12:47
Speaker 2: and that will then dictate whether you pay more or
12:49
Speaker 2: less on a monthly basis for that novated lease. A
12:52
Speaker 2: really important point that I'd make is that electric vehicles
12:55
Speaker 2: no longer cost one hundred thousand dollars like they did
12:57
Speaker 2: ten years ago. You can now pick up these Chinese
13:00
Speaker 2: built evs that have been imported in en Mass for
13:04
Speaker 2: thirty five thousand dollars on road, and even if that
13:07
Speaker 2: thing depreciates more than fifty percent over a couple of years,
13:11
Speaker 2: it's still someone a compelling proposition compared to the equivalent
13:16
Speaker 2: internal combustion engine vehicle where you're having to fill up
13:19
Speaker 2: petrol or diesel.
13:20
Speaker 1: Yeah, but would you say that it's better to li
13:23
Speaker 1: sur by?
13:25
Speaker 2: The Novata lesne works fantastically, that's game the ability to
13:29
Speaker 2: use your pre tax income that there's nothing else like
13:31
Speaker 2: it that can provide a similar benefit for the average
13:34
Speaker 2: mum and dad worker.
13:35
Speaker 1: Yeah, and fact a few years ago I remember looking,
13:38
Speaker 1: but there was very little to choose from at that
13:41
Speaker 1: time on novas a least, it's very little. There was
13:43
Speaker 1: Tesla's and then there was one or two odd pod
13:45
Speaker 1: cars that you never heard of, And now I see
13:48
Speaker 1: there as an entire menu of them. Okay, thank you, David.
13:52
Speaker 1: Great question. Okay you want to read it?
13:54
Speaker 2: One from Chris, Yes, Chris, as I had a follow
13:58
Speaker 2: up question on the topic of batteries. If I were
14:00
Speaker 2: to use this battery to charge my com which I
14:03
Speaker 2: primarily use for business purposes, and to power my home office,
14:06
Speaker 2: internet lights, computers, et cetera. Can I claim the purchase
14:09
Speaker 2: of that battery as a tax right off? I'm answering
14:16
Speaker 2: that you are. I don't know the answer. What I
14:21
Speaker 2: would say is that anything that we discuss on this
14:22
Speaker 2: show is general information. It's not advised. Go see an accountant, Chris,
14:27
Speaker 2: go see an accountant. But my view would be that yes,
14:30
Speaker 2: it would be tax deductible because it's linked to your
14:35
Speaker 2: ability to generate accessible income, which you're doing working from home.
14:38
Speaker 2: So just like you would claim the other things that
14:40
Speaker 2: you'd mentioned, you're be able to claim the battery as well.
14:43
Speaker 1: So I think the answer that the answer to your
14:46
Speaker 1: question there would be, Chris, it may be right. That's
14:52
Speaker 1: what we would legally say that to cover ourselves. Legally,
14:55
Speaker 1: we would say it maybe, and obviously our comment on
14:58
Speaker 1: it would be it should be right. Partrick, does this
15:04
Speaker 1: set up by that? I presume he means going electric
15:07
Speaker 1: solar allow the property to go off grid or do
15:11
Speaker 1: you need to retain an on grid connection. I note
15:15
Speaker 1: that in bad weather, the solar generation can be very
15:18
Speaker 1: low and question whether or not battery storage would be
15:21
Speaker 1: sufficient to keep the property powered. Super question cuts to
15:25
Speaker 1: the heart of the whole debate really about alternative energy
15:29
Speaker 1: and clean energy, whether it can sustain obviously at an
15:32
Speaker 1: industrial level, you know, can it do baseload And you
15:35
Speaker 1: can read ten thousand stories on that if you want to.
15:38
Speaker 1: But in terms of the particular issue, do you know,
15:41
Speaker 1: James or would have you any idea what the consensus
15:43
Speaker 1: is on that one?
15:44
Speaker 2: I do. I've covered this once or twice in the
15:47
Speaker 2: Work section of the Australian breaking down the financials of it.
15:49
Speaker 2: So let me spit some facts to Patrick. So the
15:52
Speaker 2: average household uses between fifteen to twenty kilo what hours
15:56
Speaker 2: of electricity on a daily basis, and these time battery
16:00
Speaker 2: systems the capacity is anywhere from five killer what for
16:03
Speaker 2: a smaller one up to fifteen killer what hour for
16:06
Speaker 2: a larger system. So on that basic mass, it's going
16:09
Speaker 2: to last you like half a day to a day
16:12
Speaker 2: on battery only if there's a blackout, So it's not
16:15
Speaker 2: going to last you very long at all. But one
16:18
Speaker 2: thing which we didn't cover too much in our last
16:21
Speaker 2: episode where we looked at solar and battery systems was
16:24
Speaker 2: the ability which is not really there right now, but
16:27
Speaker 2: it is coming in it's testing. At the moment. Technology
16:30
Speaker 2: and adaptivity is occurring with regards to being able to
16:33
Speaker 2: plug your car into the home and power your home
16:37
Speaker 2: from the car, so it's called by directional charge in,
16:41
Speaker 2: and some car manufacturers such as Kia and MG they
16:45
Speaker 2: have the hardware in the cars to allow that, so
16:48
Speaker 2: you can plug the charger in from the home to
16:50
Speaker 2: the car and you can send the power from the
16:53
Speaker 2: car to the house. But some manufacturers like Tesla, they're
16:56
Speaker 2: not there yet. They're promising to provide that technology sometime
16:59
Speaker 2: this year, but it's not there at the moment. So
17:02
Speaker 2: that is an alternative to get in a home battery
17:05
Speaker 2: that that big battery just plumked onto the side of
17:07
Speaker 2: your house. You can actually get away from that. And
17:09
Speaker 2: if you wait and just see how this technology adapts,
17:12
Speaker 2: in which one becomes a predominant way into the future,
17:16
Speaker 2: it might be better to just wait a bit and
17:19
Speaker 2: then maybe buy anyv if that's on the cards, or
17:21
Speaker 2: use your existing EV to charge at your home and
17:23
Speaker 2: then you don't have to spend eight to twelve thousand
17:25
Speaker 2: dollars on a home battery.
17:27
Speaker 1: So the car overnight can power the house. I'm not
17:34
Speaker 1: awfully careful here now because I have such a robbery
17:36
Speaker 1: grasp of all this. There's a battery of the car.
17:39
Speaker 2: Right, there's a battery, big battery of the car.
17:42
Speaker 1: Okay, battery of the car. I'm confident of that battery.
17:46
Speaker 1: What it has is so powerful and has capacity on
17:51
Speaker 1: used in your driving of the car that you could
17:55
Speaker 1: power your house. Has it got that sort of capacity
18:00
Speaker 1: in a feasible way to do a full home It does.
18:04
Speaker 2: When you look at the home battery system, they're quite large,
18:08
Speaker 2: insulated big things, and the batteries in the car you
18:11
Speaker 2: don't really see them under the floor, so you assume
18:13
Speaker 2: that they're not that large. But actually the capacity of
18:16
Speaker 2: the batteries in the electric vehicles multiple times bigger than
18:21
Speaker 2: the capacity for the home battery systems. I'm not exactly
18:25
Speaker 2: sure why, but that's the case. So my electric vehicle
18:27
Speaker 2: has a seventy kilo what hour battery capacity, and going
18:31
Speaker 2: back to the commonly installed home battery systems that you
18:34
Speaker 2: plunk on the side of the house, there between five
18:36
Speaker 2: to fifteen, So we can see the really big difference there,
18:39
Speaker 2: and it's not just powering your home from your electric vehicle.
18:43
Speaker 2: There's another thing called vehicle to grid and what that
18:46
Speaker 2: would do is you can actually send the electricity from
18:49
Speaker 2: your car's battery or ev battery back to the grid
18:53
Speaker 2: at times when it's needed, maybe at night times, and
18:56
Speaker 2: generate a bit of revenue that way. So that's still
18:58
Speaker 2: in the trial phase in Australia.
19:01
Speaker 1: I want to try and keep on the main frame here,
19:03
Speaker 1: which is you're saying that we're at a sort of
19:05
Speaker 1: a junction in this evolution of electric and battery power
19:14
Speaker 1: in the suburban home and car, where it would seem
19:17
Speaker 1: just now, it might in the future be that the
19:18
Speaker 1: house battery goes both ways into the car, or it
19:21
Speaker 1: might be that the car goes both ways into the home.
19:24
Speaker 1: Is that right? And one could we don't know just
19:25
Speaker 1: now which way it will go.
19:27
Speaker 2: That's right.
19:28
Speaker 1: Wow, Yeah, okay, I see that's really interesting, and it
19:33
Speaker 1: kind of changes the economics of the leasing of the car.
19:38
Speaker 1: I mean, it adds to the attraction if it's the
19:42
Speaker 1: case that the car becomes the sort of the engine room,
19:46
Speaker 1: if you like. Of all this really interesting, Okay, very good.
19:49
Speaker 1: We will take a short break and we'll be back
19:51
Speaker 1: in a moment. Hello, Welcome back to the Australian's Money
20:15
Speaker 1: Puzzle podcast. I'm James Kirby talking to James Gerard at
20:19
Speaker 1: Financial Advisor dot com dot au, who is also I
20:23
Speaker 1: might add, a sincere car geek and in recent times
20:26
Speaker 1: has updated himself to the world of electric cars. I
20:30
Speaker 1: wanted to ask. There's a couple of questions also, James
20:32
Speaker 1: and John just going to package together now that came
20:34
Speaker 1: from that first show. The first one is it's criticism
20:39
Speaker 1: of the show, I suppose, and of the whole scene
20:41
Speaker 1: is that it seems like the whole thing is designed
20:45
Speaker 1: for the homeowner with the standard suburban home with a
20:49
Speaker 1: garage and a bit of space for the car, and
20:52
Speaker 1: everyone else's to some extent left out. Is that true?
20:57
Speaker 2: It is absolutely true. There's a group of people who
21:01
Speaker 2: don't have the ability to be able to put solar
21:03
Speaker 2: panels on the roof and home battery systems in and
21:06
Speaker 2: they include people who live in apartment blocks they need
21:09
Speaker 2: to vote with the other apartment owners to be able
21:12
Speaker 2: to make those decisions. And also people that live in
21:15
Speaker 2: inner city areas where there's no off street parking, so
21:19
Speaker 2: they don't have that ability to be able to in
21:21
Speaker 2: all the cases buy the electric vehicle because it's hard
21:24
Speaker 2: for them to charge it. I've seen on TV people
21:27
Speaker 2: that stuck electrical cords and put them over trees and
21:31
Speaker 2: over foot paths to try and charge their evs, and
21:32
Speaker 2: councils invariably tell them off due to public liability reasons.
21:36
Speaker 1: Right dot, Some concerts make an effort, and I assume
21:40
Speaker 1: they will increasingly do so to provide public charges. I mean,
21:45
Speaker 1: I know that there are such council charges out there
21:49
Speaker 1: in public areas that are not in private property. Do
21:52
Speaker 1: they work? I mean I hear stories that there's cues
21:55
Speaker 1: for them, that they're vandalized, et cetera. Do they work?
21:58
Speaker 1: And are there many of them?
22:00
Speaker 2: They do so. In my household, it's a ritual every
22:03
Speaker 2: Friday night we go to the same Japanese restaurant at Chatswood,
22:06
Speaker 2: which is on the upper north shore of Sydney, and
22:08
Speaker 2: we try and park in one of two electric vehicle
22:12
Speaker 2: spots which have council charges there, and it's really hard
22:16
Speaker 2: to get because they're just so popular. It might be
22:19
Speaker 2: one in every four trips that we're able to actually
22:21
Speaker 2: charge our vehicle on the street using one of these
22:24
Speaker 2: council charges, So I'd say availability of the charger is
22:27
Speaker 2: an issue. And then another thing which I'd add is
22:30
Speaker 2: that if one of the main drivers for you to
22:32
Speaker 2: purchase an electric vehicle wasn't just the financials but also
22:35
Speaker 2: the environmental benefits, you have to think, how are these
22:38
Speaker 2: council electric vehicle charges generating electricity? It's probably coming from
22:43
Speaker 2: the grid, which is still predominantly from coal powered fire
22:46
Speaker 2: powered electricity generators, which isn't so great for the environment.
22:50
Speaker 1: No, though I suppose the person would say, would argue
22:53
Speaker 1: that the core component is feeding, is not decreasing, and
22:58
Speaker 1: on that basis in the right direction. Is there only protocol?
23:03
Speaker 1: And this is it just like whoever it gets there first?
23:05
Speaker 1: Is can you book them?
23:07
Speaker 2: You can't book them, But there are apps where you
23:10
Speaker 2: can see around your local area which charges are available,
23:14
Speaker 2: which ones are being used, and the cost as well.
23:17
Speaker 2: And what I've noticed is that if there are say
23:20
Speaker 2: two charges side by side, if one of them is
23:24
Speaker 2: being used and you come and use the second one,
23:27
Speaker 2: you don't get the full speed of the charger. You
23:29
Speaker 2: only get fifty percent because the power gets split. So
23:32
Speaker 2: for you to get that faster charge in you need
23:34
Speaker 2: to be the only one charge in your vehicle there, right.
23:37
Speaker 1: I see, Gee, okay, sounds like there's a fair bit
23:39
Speaker 1: to go on the civic side of this, And I
23:42
Speaker 1: suppose to some extent that's an issue of scale. If
23:44
Speaker 1: you remember the early days of mobile phone, will I
23:46
Speaker 1: get a mobile phone? Well, only so many people have
23:49
Speaker 1: a mobile phone, you know. But then would you get
23:52
Speaker 1: a mobile phone today? Well, of course, you can barely
23:54
Speaker 1: live without it. And maybe that we're coming to that,
23:57
Speaker 1: moving towards that inflection point where it's all the economies
24:02
Speaker 1: of scale makes sense around around this issue of clean
24:05
Speaker 1: energy and solar power in particular, above the electric cars
24:11
Speaker 1: second hand value good, no good, hopeless, peaceable. It's always
24:17
Speaker 1: a question.
24:19
Speaker 2: It's really interesting because I think that the commonly held
24:21
Speaker 2: perception is that they're junk. They're worthless after the battery
24:25
Speaker 2: runs out. However, looking at the experience of teslas, which
24:28
Speaker 2: have been around the longest for electric vehicle manufacturers, there
24:32
Speaker 2: still is an aftermarket for them. People are buying them
24:34
Speaker 2: ten years old. They're paying tens of thousands of dollars
24:37
Speaker 2: for these teslas with wonky batteries because they're just having
24:40
Speaker 2: the batteries replaced, and understand that it can be anywhere
24:44
Speaker 2: from ten to twenty thousand to replace the battery. But
24:46
Speaker 2: you do that and you've got this electric vehicle that
24:49
Speaker 2: will last another ten years with very minimal maintenance required.
24:53
Speaker 2: And then if we come back to today's electric vehicles,
24:56
Speaker 2: which are circup thirty five thousand for the more budget
24:59
Speaker 2: orientated ones, again spend ten thousand dollars on it, and
25:02
Speaker 2: then after five years you might pick it up for
25:05
Speaker 2: fifteen thousand or so. So someone will spend some money,
25:08
Speaker 2: so twenty five thousand, and a lot of people won't
25:11
Speaker 2: be able to afford the full thirty five thousand. It's
25:13
Speaker 2: a lot of money, but they might be able to
25:14
Speaker 2: afford and scraped by twenty five so there'll definitely be
25:16
Speaker 2: enough to market and an industry there where these electric
25:20
Speaker 2: vehicles will be old batteries taken out, those batteries recycled,
25:23
Speaker 2: new battery put in, and then they'll be sold again.
25:26
Speaker 2: So it quite funny to see or because we don't
25:29
Speaker 2: see this at the moment, but the used car dealers
25:30
Speaker 2: are going to have more electric vehicles being sold rather
25:33
Speaker 2: than just internal combustion engine vehicles.
25:35
Speaker 1: Yeah, And if the old car electric car, it's given
25:41
Speaker 1: a battery to d to replace the battery it had
25:44
Speaker 1: ten years ago. Is that battery almost for sure to
25:49
Speaker 1: be a better speedier, charge faster.
25:52
Speaker 2: Yeah, it'll be comparable, but it'll be lighter. It'll probably
25:56
Speaker 2: last for longer as well, because the battery technology has
25:58
Speaker 2: improved over the.
26:00
Speaker 1: Take less time to charge this battery.
26:03
Speaker 2: Yeah, it will take less time to charge depending on
26:05
Speaker 2: the hardware of the car. If the hardware within the
26:08
Speaker 2: car can be upgraded to match the better specs of
26:11
Speaker 2: the battery, yes, But if the hardware is stuck ten
26:13
Speaker 2: years ago for the car, well then no, you're stuck
26:15
Speaker 2: with the charging speeds ten years ago.
26:17
Speaker 1: Well, the ten year old car can take this new
26:21
Speaker 1: battery anyway, can It is optional whether you upgraded. It
26:24
Speaker 1: will work in the old car. The new battery will
26:26
Speaker 1: work in the old car.
26:28
Speaker 2: That's correct. Yeah, it will absolutely work. And I was
26:31
Speaker 2: speaking to my local mechanic a little while ago when
26:34
Speaker 2: he was teasing me saying that I'm going to be
26:35
Speaker 2: replaced by AI over the next ten years.
26:38
Speaker 1: And he was teasing you that he would be replaced
26:40
Speaker 1: by AI.
26:40
Speaker 2: Are you you were saying that I'm going to be
26:43
Speaker 2: replaced by AI. So I gave it back to him,
26:45
Speaker 2: saying that you're going to be replaced by electric vehicles.
26:47
Speaker 2: You're not gonna be able to service cars anymore. And
26:49
Speaker 2: he said something really interesting. He said that I've thought
26:52
Speaker 2: about this and I can see it coming. I'm seeing
26:54
Speaker 2: less cars come into my workshop because more people are
26:57
Speaker 2: buying electric vehicles that don't need the heavy servicing that
27:00
Speaker 2: traditional cars will have. He said, but there is a
27:03
Speaker 2: developing industry where combustion engine vehicles, so to be clear,
27:07
Speaker 2: the petrol and diesel engine vehicles are being repurposed into
27:11
Speaker 2: electric vehicles. So it feels there's this industry emerging where
27:15
Speaker 2: you'll be able to just take your petrol toy camera in,
27:19
Speaker 2: leave it there for a day, and then it pops
27:20
Speaker 2: out as an electric vehicle a day later.
27:22
Speaker 1: Wow, I suppose that's probably happening at the top end
27:26
Speaker 1: luxury messids or whatever rolls roys or whatever. You know,
27:30
Speaker 1: the car is very valuable and collectors will do anything
27:34
Speaker 1: to keep What they spend on them is unbelievable, so
27:37
Speaker 1: they would have no qualms at all or spending whatever
27:40
Speaker 1: it takes to make that an electric version of what
27:43
Speaker 1: it used to.
27:44
Speaker 2: Be or whatever.
27:45
Speaker 1: Very interesting. Yeah, I don't know about you being replaced
27:48
Speaker 1: by AI and the mechanic either. I don't know, so
27:51
Speaker 1: you could be replaced by AI, and the mechanic could
27:53
Speaker 1: be replaced by a robot. We all have our concerns,
27:56
Speaker 1: none of which I think we need worry about too
27:58
Speaker 1: much if we're good, and that's all you have to be,
28:01
Speaker 1: all right now, Carl. The final question for cup, which
28:05
Speaker 1: is a considerable question hot water heat pumps and solar
28:11
Speaker 1: hot water. We get right into the plumbing here. You
28:15
Speaker 1: discuss solar panels and batteries, which was great, but I
28:18
Speaker 1: was curious about how hot water heat pumps and solar
28:22
Speaker 1: hot water systems fit into the picture. My possibly outdated
28:26
Speaker 1: understanding is that roughly a third of household power goes
28:29
Speaker 1: into heating water, another third into running the fridge, and
28:33
Speaker 1: the rest into everything else. So I'm wondering, ay, are
28:37
Speaker 1: you generally better off with solar hot water or with
28:39
Speaker 1: electric water heating powered by roofed up solar, and how
28:44
Speaker 1: do the rebates or incentives compare between those options? James Soluers,
28:51
Speaker 1: Thank you, James.
28:53
Speaker 2: So to be clear, Carl is speaking about the thing
28:56
Speaker 2: that you see on some people's roofs where there's this
28:59
Speaker 2: big shiny aluminium looking thing with then these solar panel
29:03
Speaker 2: looking things that they come off it. That is the
29:04
Speaker 2: rooftop solar And I'd always thought that it was a
29:07
Speaker 2: solar panel then heating up the water inside of that
29:10
Speaker 2: water tank that's kept on the roof, but it's not
29:13
Speaker 2: actually a solar panel. It's actually tubes and the sun
29:16
Speaker 2: hits those tubes which has water in it, and it
29:18
Speaker 2: heats up the water inside that tube and then sends
29:21
Speaker 2: it back into the big canister. And that's how rooftop
29:24
Speaker 2: solar works. And that's starkly different to what Carl's mentioning
29:28
Speaker 2: with the hot water pump, which I understand to be
29:30
Speaker 2: what you're having your laundry that the water tanks or
29:32
Speaker 2: underneath your house or outside the side of your house,
29:35
Speaker 2: which you can then separately have solar panels installed on
29:38
Speaker 2: the roof which can then power the electric pumps inside
29:42
Speaker 2: of those water tanks to then heat your electricity. So
29:45
Speaker 2: looking at those two things side by side, it depends
29:48
Speaker 2: on the state incentives, which varies from state to territory,
29:51
Speaker 2: but generally, as a ruler thumb, you get more incentives
29:55
Speaker 2: to put solar panels on the roof than you do
29:58
Speaker 2: to put the rooftop sol the hot water system in
30:02
Speaker 2: and also on an ongoing basis, it tends to be
30:05
Speaker 2: more efficiency with the solar panels paired up with the
30:09
Speaker 2: heat pumps or the water tank combo compared to the
30:11
Speaker 2: rooftop hot water solar. And the reason is that there's
30:15
Speaker 2: a thing called boosting, which is thesefto hot water solar
30:18
Speaker 2: things they still have electric pumps in them because if
30:21
Speaker 2: there's no sun for a couple of days, well then
30:23
Speaker 2: you don't have cold showers. So they still need to
30:26
Speaker 2: heat the water up at times, and that can be
30:29
Speaker 2: variable when that electric pump kicks in, and it could
30:32
Speaker 2: be at peak times, which then you have to pay
30:33
Speaker 2: more electricity. Whereas if you have solar panels on the roof,
30:36
Speaker 2: you can actually time with the settings, decide when you're
30:40
Speaker 2: going to heat up your hot water tank that you're
30:42
Speaker 2: keeping your laundry or underneath your house. So the operating
30:45
Speaker 2: costs of lower as well. So both are great, But
30:47
Speaker 2: i'd give the tick of approval or the winner would
30:50
Speaker 2: be the solar panels paired with an internal water tank system.
30:55
Speaker 1: Okay, and the rebeats and incentives.
31:00
Speaker 2: Similar similar, yes, similar, bit slightly higher for the solar panels.
31:04
Speaker 1: Right, very good, okay, folks. I do hope that really
31:07
Speaker 1: brings you up to speed on this issue. I know everyone,
31:11
Speaker 1: many people are very interested in this issue. I find
31:14
Speaker 1: the electric car story amazing, James. I must say, even
31:18
Speaker 1: in the period we've been talking about it, how much
31:20
Speaker 1: it's changed and how much it's going to change. And
31:22
Speaker 1: if you had said to me even I remember asking.
31:25
Speaker 1: I remember telling someone that sooner or later they're going
31:26
Speaker 1: to have coal mines powered by alternative energy. And I
31:30
Speaker 1: remember this person just laughing, and that's come to pass.
31:32
Speaker 1: If you had said to me three years ago, there
31:36
Speaker 1: will be electric utes and they will be very popular,
31:39
Speaker 1: that they'll be one of the biggest selling utes around,
31:42
Speaker 1: I would have said, you must be kidding, and guess
31:44
Speaker 1: what the Give someone a good deal and they will
31:48
Speaker 1: move like lightning. I think they what's it called the
31:51
Speaker 1: byd Uts. It's now the one of the biggest selling utes.
31:54
Speaker 2: Yeah, the Shark. I believe it is a shark.
31:57
Speaker 1: That's right, Yes, that's right, that's the one. So there
32:00
Speaker 1: you go. You see, it happens very quickly so you've
32:02
Speaker 1: got to keep up to speed. And James Gerard, I
32:04
Speaker 1: must say financial advisor, car geek and what Heart avelergy
32:09
Speaker 1: expert's the ideal guest to have on the show today.
32:12
Speaker 1: Thank you very much, James.
32:14
Speaker 2: Thank you so much. And don't forget whiskey collector as well.
32:19
Speaker 1: Yes, sometimes we can almost see that we can peep
32:22
Speaker 1: at that whiskey collection when he does across from home.
32:25
Speaker 1: All right, lovely to talk to you. Keep those questions rolling,
32:29
Speaker 1: everybody the money puzzle at the Australian dot com dot au.
32:33
Speaker 1: Talk to you soon.