The RBA and Interest Rates

The Treasurer and the press seem to think that the banks should automatically pass on all of the 50 percentage point interest cut.

But they don't understand the way it works. The "cash rate" has nothing to do with mortgage or small business rates. It is the overnight or short term cost of lending or borrowing by the banks. So it is firstly a domestic rate and secondly does not reflect the true cost of funds, which includes offshore sources and different costs.
Pre-GFC the cost of offshore funds was lower than rates on retail deposits, therefore the whole of the of the cash rate was passed on. But now things are different. The availability of cheap wholesale funds has dried up since the GFC hit in 2008.