I lived in New Zealand for a few years, and the almost total lack of a tipping culture there rocked. Service didn't suffer. If anything, service was better because maybe the employees were less inclined to engage in excessive tip-seeking behavior (e.g. ultra-attentiveness, flirting). I talked to some kiwis who found the notion of tipping for service mildly offensive--like casting off some coins to the peasants based on your judgement of them.