Leaving a tip is a much more compicated transaction than you may have ever imagined as poor regulation has created a moral minefield that needs to be carefully navigated.

In the eyes of the law, what exactly is a tip?  

Not long ago, tipping was considered an American custom, but it is now common practice here. It's on the rise in synch with the explosion of Australia's dining culture in general. It seems pretty straightforward: happy customers might leave a little extra payment at the end of the night as a thank you for excellent service.   

Patrons do this with the expectation that the person they leave the tip for receives it, but this is not always the case.  

Tips are classed as earnings and should be listed as additional benefits on one's income tax return. Now, I'm not naming any names, but I worked as a waitress whilst putting myself through university and I would be very surprised if the ATO had any statistics showing that this practice is dutifully followed by the majority of hospitality workers.  

People aren't declaring their tips, so that money then exists outside the grid.  

Probably because it doesn't show up in the paperwork, this section of the economy has been left completely unregulated. There is no national legislation, and no state or territory laws I know of (although I'd be happy to be corrected) that addresses the issue of who tips belong to.  

To foster better regulation the first thing we need to do is to change our attitude.  

For a long time, there has been a prevailing attitude in the business community that regulation is an impediment to business, and that we must press forward with deregulation.

I believe this deregulatory approach, which focuses on throwing out as many of the old rules as possible, is a retrograde step.  

Despite all the rhetoric about it, very few people genuinely support the idea of blanket deregulation. Instead, we think it would be nice to keep the laws which protect us, and throw out the ones which restrict or punish us. Unfortunately, everybody else feels exactly the same way.

This demonstrates precisely why regulation is important: to keep self-interest in check.

It's common sense that a sound regulatory system upholds and supports the interests of the community. Business needs to realise that this in turn raises the standards in our marketplaces by fostering efficiency and innovation. Whilst it's true that too much or inappropriate regulation can have a negative direct effect, too little is likely to have a far more destructive influence.

Instead of characterising regulation in terms of higher taxes and fewer freedoms we urgently need to get over our gut reactions and adopt a more mature mindset. We need to appreciate the security and infrastructure regulation provides for us to operate within.

Managed well, Risk Equalisation has an important social role to play in ensuring health insurance is available to all Australian citizens, alleviating considerable pressure from the public purse. 

I'd like to highlight an area of regulation pertaining to the private health insurance sector that urgently requires reform.

The Risk Equalisation scheme must be amended, because at the moment, it totally lacks equity. Through my role as Chairman of HIRMAA (the peak body for restricted and regional funds I've been raising this contention with the Federal government (and the previous one) for quite a while. Unfortunately regulatory reform in this area is being stymied, due to no good reason I can see, other than the powerful opposition of the big insurers.

Risk Equalisation is essentially a new name for what we used to call reinsurance. It's a concept which has been a central aspect of private health insurance since October 1976 (having been preceded by a similar arrangement known as the Special Account that had been introduced in 1959). 

I agree we need to retain the system of Risk Equalisation funds pooling. However, because of the differences between the big and small players, a far more equitable approach would be to have two separate pools.

An independent judiciary, a strong civil society and an effective bureaucracy are far more important to social stability and economic development than the application of Jeffersonian, Hamiltonian or Westminster principles.

In substance, I abide by the traditional formulation of the role of the state, which is to provide peace, order and good government. Governments should do what they do best - in Paul Ormerod's words, "Governments should do much less...detailed short-term intervention...and [spend more time] thinking about the overall framework." They should shun ideology and focus on making the environment right for us to go about our business, while being mindful of the consequences of allowing too much freedom.

Strangely enough, to allow citizens and business the freedom they crave, good government must contain an element of regulation, it must, in some cases, in some ways, restrict freedom. This is because regulation is an essential ingredient of governance and, in turn, governance is fundamental to the success of the modern state and of modern economies. Maslow developed a "hierarchy of needs" for individuals. The higher needs in this hierarchy become relevant as a motivator of behaviour only when the lower needs are satisfied. Once an individual has moved upwards to the next level, needs in the lower level will no longer be a priority. I think this model is applicable at the societal level as well. I think a similar pyramid or hierarchy of needs can be constructed for society as a whole.