In a proactive way, what we've been promoting for some time is the approach that the Australian government took to determine a reasonable rate.
We understand as merchants the importance of having a vibrant credit card system and we want to make sure that's ensured. The Australian government, when they looked at this as well, studied the issue, studied how much the costs were for all of those components of the credit card system to understand what was necessary and what was too much in terms of costs.
The recommendation that we would make is that a very fulsome study be conducted on all aspects of the credit card network system to understand where there is overcharging being done and where there's a situation where reductions should be passed along to merchants. With that in mind, the Australian government came back and initially created a rate of 0.55%. What we're talking about in Canada right now is 1.5%. They've since reduced that to 0.5%. From what I understand, they're looking at reducing that further to 0.3%.
In their review of the system in Australia, they have found that 0.5%, or an even lower rate, is sufficient to ensure that members of the credit card industry are making enough money, and compare that to 1.5% in Canada. We don't have a different system; it's exactly the same. What we're saying is it's too much. Studying that first, understanding and making sure that it's a reasonable rate is what we would suggest.
The other point that we've made, which we've seen in the United States, for example, is that some states in the U.S. have looked at the possibility of actually not charging credit card fees on the tax portion of purchases made. In our industry, for example, as I mentioned earlier, we collect $18-billion worth of taxes for federal-provincial governments. The thanks we get for that is when those purchases are made by credit cards, it costs us 1.5% to 4.5%.
What we suggest is if finance is looking at this, if this is something that you want to study, I would suggest that this would be a very good avenue to look at as well.