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There are usually no mandatory gratuities or built in restaurant service charges of any kind in Australia (although a 10% Goods and Services Tax (GST) will be included in the total figure on your bill).
However, in some cases you may find that service on the weekend or a public holiday attracts an additional fee. This should by law be notified in advance on the menu or via a sign. Larger groups may also be advised that a service charge is mandatory. What you should do if the service is truly awful is open to conjecture.
Tipping is not expected anywhere, and historically has not been the norm - basic wage rates and overtime payments in the hospitality industry have generally been protected.
Tipping in restaurants is not necessary, but certainly appreciated, and seems to be becoming more common. Some Australians leave tips for good restaurant service, but usually only in expensive restaurants. 10% for good service appears to be the usual figure, with more for exemplary service. There is a higher expectation that large groups leave a tip. Tips are often pooled and shared out amongst all staff.
In bars and taxis, tipping is also not expected, although many people simply leave some of their coin change on the bar after picking up their drink, or tell the cabbie to keep the change.
Tipping in hotels and other service industries (such as hair salons) is still uncommon, though a small tip for carrying cases to a room would be fairly normal, perhaps a dollar a case.
Australian service is often more casual than in many countries, even in expensive restaurants and hotels. You will very rarely get fawning service in Australia - in keeping with Australia's relaxed national character that usually seeks to treat everyone as equals. However, if you have received rude or incompetent service, you should complain, politely, or do what Australians tend to do (given that Australians also generally don't like to cause a fuss) and just never go back to that establishment again.
Remember that manners cut both ways - "Please" & "Thank you" go a long way to ensuring your experience will be a good one.
A side note: In Australia, the term "tip" is also the name used for a garbage dump, rather than having anything to do with gratuities.