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