There is a flaw in the way the Australian Governments controls Monetary Policy.
A so called independent body, The Reserve Bank, tries to control inflation.
The Reserve Bank Board sets interest rates so as to achieve the objectives set out in the Reserve Bank Act 1959:
the stability of the currency of Australia;
the maintenance of full employment in Australia; and
the economic prosperity and welfare of the people of Australia.
So if the RBA controls inflation by setting interest rates then the flaw that exists is that the institutions that distribute the money (the Banks) do not have to follow the RBA's announcements when they change interest rates.
The Banks have the ability to ignore the RBA announcements all together or only pass on part of the changes. In fact this flaw in the system has been recently highlighted. The banks have flagged that they will change rates independently of the RBA's announcements.
So there appears to be two options to overcome this flaw in the system
1. Legislate that the Banks must pass on in full all RBA changes - unlikely
2. Government needs to come up with some other system of controlling inflation (and the economy).
Otherwise the governments efforts (through the RBA) to control Monetary Policy is limited and could be ineffectual.