Mr. Frank Maughan:

In answer to the Senator's question, if I understand it correctly, if one considers the carbon tax as a sort of consumption tax on fossil fuels which applies to householders, to people driving cars, and to businesses in terms of how they heat their buildings etc., the more the types of interventions we have been discussing this afternoon are rolled out and the less fossil fuels are used in the transport system and in the built environment, the less liability people will have to pay the carbon tax because their consumption of fossil fuels will decrease. From that point of view carbon tax is a price signal to householders and to other consumers in the economy to say that we want them to consume less fossil fuels in their day-to-day activities, in how they heat their homes and in how they drive their cars. It will be of benefit to the consumer who decides to invest in a deep retrofit of his or her house because he or she will ultimately end up paying less in carbon tax because of the fact that he or she will be consuming less fossil fuels. That is the very simple answer.

Obviously there is a separate question in terms of where the carbon tax will go over time, about which I spoke briefly earlier. There is a question and the committee has already heard advice on where the carbon tax might need to go in the medium term to make sure the signal to householders and other consumers is strong enough to create that incentive in the economy. The committee has also discussed this issue with the advisory council. The two types of interventions - if I can call them that - travel in parallel. They affect the decision-making process for consumers, householders and firms when they come to make these types of interventions and investments in upgrading their homes and replacing their vehicles and so on. It is all part of a package. I hope that answered the question. I am not sure if that is what the Senator was getting at.