Archive for September, 2013
The Logic of Logbooks
There’s been a lot of furore about the changes to the Fringe Benefit Tax rules – what’s it going to do to the car sales industry, what it’s going to mean for companies who want to retain their employees, what it’s going to mean for the economy in general and so forth. My fellow-blogger Dave has posted quite a few very informative articles on the topic ().
However, let’s have a wee think about the small implications. Not the big ones that discuss whether or not the changes in the rules will affect what’s left of the Australian car manufacturing industry but the ones that affect what you and I will have to do if our company is going to provide us with a novated lease under the new system.
One of the key changes is that when it comes to tax time, you can’t just say that 20% of the kilometres driven were personal and the rest were for business. We’ve all got to use log books. A lot of people were already on the logbook method for cars dished out as part of a salary package. If you’re one of these people, you’re probably not going to notice a lot of difference, if any.
The idea behind the logbooks is that some people – OK, make that a lot of people – were using their cars for way more than 20% of the kilometres driven for personal business. This meant that they were paying less fringe benefit tax than they really ought to. The whole idea behind t
he changes was meant to close this loophole so people who weren’t on the logbook system paid a fair amount of tax.
The good news is that keeping a logbook isn’t all that hard. All you have to do is to write in the date of the trip, the purpose of the trip (which you can shorten down to “business” and “personal” rather than trying to fit in “taking Amy to Sarah’s birthday party and picking up a roll of wallpaper from the hardware store on the way back”) and the odometer reading at the end of the trip. Then you have to work out how many clicks the trip took by subtracting the odometer reading at the end of the last trip from the end of the current trip – which requires a good head for mental arithmetic or a handy cellphone with a calculator app. Most of us, however, can rely on the trip computer that most modern cars come with. This sounds fiddly, but it’s not that hard once you’re into the swing of things.
Naturally, people have already come up with smartphone apps for vehicle logbooks. Sole traders and the self-employed already have to keep logbooks, for example, so there’s been plenty of time to develop them. I guess it’s only a matter of time until someone comes up with an app that logs your trips and sends the info directly to the office bean-counters… or Big Brother.
The big thing to know is the difference between what’s considered a work trip and what is considered a personal trip. The real stinger here is that the commute to and from work is not considered to be a work or business trip – it’s a personal trip. If you took the bus to work instead of chugging along in your little Peugeot 206 hatchback or whatever you drive, you’d have to fork out for the bus fare and your employers wouldn’t have to pay your bus fare (in most cases, and we won’t go into the subsidies that some eco-minded businesses have tried here). However, if you have to visit a client, make a delivery, pick up some supplies for the office or something like that, that’s a business trip.
Logbooks aren’t all that hard, so don’t get into a panic if you have to keep one. You can still get a car as part of a salary package deal, and you can still claim some of the mileage back against tax.
Fringe Benefits Tax proposed changes: an update.
Writing this one day before the election and with the expectation the Coalition will win doesn’t change the past; much like the words from the immortal “Dragnet”, these are “just the facts”. Since the changes were announced by Kevin Rudd, this is what’s happened: approximately $160 million dollars worth of business for the Australian car industry has been wiped in August. Sales had been growing at around 5% for the six months until June 30, it’s now down by 0.2% in August compared to the same time last year. 
At around 4600 vehicles at an average cost of $35000, it’s a significant hit. Yards are holding far more ordered but unsold stock due to so many cancelled orders. Jobs have been lost in attached industries and sales are down by 3.5% in Queensland and up to 8% in Western Australia. Business purchases are down 10 percent compared to this time last year impacting further on Ford Australia’s already tattered figures, with the venerable Falcon finding just 573 new homes in August, the lowest in the nameplates 53 year history. The changes mooted were intended to help raise $1.8 billion as an offset of scrapping the carbon tax yet there’s been no formal analysis of the changes and with many buyers in business purchasing vehicles via means that don’t attract the FBT or defer purchases then that figure is seeming more unlikely.
Holden’s new Commodore, selling under internal expectations still, though, managed just 400 more in August than July, delivering 2809 vehicles. Only Mitsubishi, Volkswagen, Hyundai and Mazda saw sales increase. Also, with fuel prices in no danger of retreating, it’s unsurprising that the Mazda 3 and Toyota Corolla were the highest sellers in August (4188 and 3861), followed by the Toyota HiLux, Holden’s VF Commodore, the Hyundai i30 and Holden Cruze variants.
Flying Cars – Not Science Fiction Any More
When the year 2000 rolled around amid fears of the Y2K bug making computers and civic systems crash (remember that?), we heard a few people asking “Where are the flying cars?” in a reference to all the guesses that people had made back in the 1950s or so about what transportation would be like in the 21st Century.
Well, the wait is over. The flying car is here, or at least it’s in the USA. This doesn’t mean that Ford Falcons are really able to soar on thermals like their namesakes or that the wings on the Mazda logo are still anything other than metaphorical.
But a flying car has been invented. Or perhaps one could call it a road-worthy light plane.
Surprisingly enough, it’s not Saab that’s put out the first real flying car, in spite of the fact that there are more things with the Saab logo in the air than there are on the roads (that’s just a guess and don’t quote me… but Saab does make everything from fighter planes down to little light planes and is primarily an aircraft company). Instead, it’s a company called Terrafugia that has put wings on cars… or road-legal wheels on a plane.
“Terrafugia” means “escape from the earth” and that’s pretty much what these flying cars are designed to do. And they’re more than just a dream. One was demonstrated at the recent Oshkosh air-show, the Terrafugia Transition. OK, they cost more than a modest family home to buy, but there probably are people out there who are interested and are going to take them on.
So what can the Transition do? Obviously, it can fly and it can go on the road legally. On the road, it looks a bit peculiar – it looks more like an amphibious vehicle with the wings tucked up beside it like the legs of a cricket or praying mantis. A touch of the button extends the wings and the propeller on the back gets ready to spin into action. Hey presto – the car is airborne (watch it here).
Obviously, the Transition isn’t massive. It can carry two people and possibly a set of golf clubs or a wee bit of luggage. The official website says that it can cruise at 160 km/h, although I guess that this is in the air rather than on the road. As a plane, the torque is fairly juicy, of course, as the Transition has to accelerate fast enough to generate the lift needed to get off the ground, and it needs a shade over half a kilometre of runway to get airborne. Once in the air, it has a range of 660 km.
There are dual steering controls – the regular steering wheels and brakes for when the Transition is on the road, and a stick and rudder pedals for steering in three dimensions (i.e. when it’s in the air). There aren’t a lot of other bells and whistles – all the thingummybobs pilots need to fly legally take up the rest of the dashboard.
The Transition fits into an ordinary single garage, so it’s likely to appeal to the sort of pilot who doesn’t want the hassle of carting out a trailer every time they want to take the plane out for a little spin. Obviously, two licences are needed: a PPL (private pilot’s licence) and a driver’s licence.
Don’t look out for these in our car reviews page just yet, though. Maybe in 50 years’ time.
Level 2, 9 Help Street