The Reserve Bank of Australia has violated its Charter

Taken from the RBA website (emphasis mine):

The Reserve Bank of Australia (RBA) is responsible for formulating and implementing monetary policy. The Board's obligations with respect to monetary policy are laid out in the Reserve Bank Act 1959. Section 10(2) of the Act, which is often referred to as the Bank's 'charter', says:
"It is the duty of the Reserve Bank Board, within the limits of its powers, to ensure that the monetary and banking policy of the Bank is directed to the greatest advantage of the people of Australia and that the powers of the Bank ... are exercised in such a manner as, in the opinion of the Reserve Bank Board, will best contribute to:

(a) the stability of the currency of Australia;
(b) the maintenance of full employment in Australia; and
(c) the economic prosperity and welfare of the people of Australia."

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Ref: www.rba.gov.au/MonetaryPolicy/about_monetary_policy.html


The greatest advantage to the people of Australia would be their right to distribute their own goods and services without any charge to do so.
However, the current system prevents any distribution without compound interest being returned to the bank (for no other purpose than for the bank's profit).
This is direct and irrefutable evidence that the Reserve Bank is NOT working to the greatest advantage of the people of Australia and therefore is in direct violation of its charter as quoted above.

When the central bank of a country requires more money back than it has issued (interest), the extra funds for the repayment must either come out of circulation at the expense of another entity in the country (usually a smaller business) or will force someone in the country to borrow more from the bank to honour its payments.
Thus, the charging of interest is the main CAUSE of inflation, and raising the rate merely adds fuel to the fire - increasing the cost of production, and demanding higher wages to maintain the same standard of living.

The desire for a 'favourable balance of international trade' is just another marginal attempt at filling the gap between the price of local production and the available money to buy it.
The job of the modern economist (who is taught to confine his efforts WITHIN the current system) is to minimise the negative impact of the charging of interest.

The policy stated in article (b) above; "the maintenance of full employment in Australia" reveals a chronic missunderstanding in the science of economics.
Employment is a means, not an end.
Along with the obvious contribution to production, it is also the means by which the consumer aquires his/her purchasing power so that he/she may live comfortably. Employment is not an end in itself.
In this age of automation and technology, we don't need a policy of "full employment". The problem these days is not scarcity of goods and services, it is the fair distribution of these goods and services to the citizens.
The ONLY reason that full employment is seen as a benefit is because wages, salaries and dividends make up the ONLY source of purchasing power for the majority of consumers. The reality though, is that this total amount of purchasing power is never enough to distribute all the goods and services to all the consumers (labour is only part of the cost of production).
So, we over-produce, we invent new unneccessary jobs, and we send both parents out to work to attempt to fill the gap. This one thing alone creates a whole industry providing day-care because few families can afford to live off a single income.

So much effort is expended in many areas of life - attending to symptoms without addressing the underlying causes, and this is the main issue in economics today.


So, what is the solution?
... To address the underlying cause of inflation which is the issuing of money into circulation ONLY as a debt to be repaid with interest.

An example of the result of these policies is that over half of our taxes now go towards paying off the interest of our government's debt to the banks.
Just by abolishing the charging of interest, our taxes would be cut in half - with no penalty to anyone (except to reduce the profit margin of the banks).


As to the policy in artice (a) above; "the stability of the Australian currency"; no interest means for the most part, no inflation.
You can't get much more stability than that! If my savings are sufficient to buy the same value of goods in 10 years as they are today - I don't need interest to [attempt to] compensate for the devaluing of the Dollar. As for foreign trade, no country would fail to see the benefits of trading with one of the most stable currencies in the world! We would not be forced into exporting any more than our surplus (or over-produce so that we can bring more money into the country), and we could import whatever we fancy.

In order for common sense to regain a foothold in finance, it will require our government to take back its control over monetary policy which can be done either by careful revision of the Reserve Bank Act, or abolishing the bank if it fails to rectify the obvious errors.

Responsibility
The responsibility of the resources of Australia and the wellbeing of its citizens, are vested in our representative, democratic Government.
Australia should belong to the Australian people - the "Common-weath" as it was constituted.