Societies have good reasons for regulation: to make the community safe; to deter frauds and spivs and shysters; to protect the environment; to protect consumers; to facilitate the operation of markets and limit anti-competitive practice. These reasons will not disappear, and neither will regulators.

But this year, if we were to list incidents of regulatory failure - a failure to protect the community from danger, damage and harm - we need both hands to count. A few examples demonstrate that flawed regulatory practice costs the Australian community time, money, effort and lives. It stresses individuals and companies, and it compromises the results that society hopes to achieve through regulation.

In the Australian building industry, substandard flammable cladding still threatens lives.

In NSW and the ACT, building standards have been derelict for too long. Official policies of neglect have resulted in substandard buildings and imposed substantial losses on owners and tenants. Only now are standards being repaired and enforced.

Recent history has shown that, for too many wage and salary earners, it is the luck of the draw that guarantees a correct wage - not a regulator with a charter to ensure companies comply with workplace law.

In the financial sector, the recent investigation by AUSTRAC into Westpac has resulted in allegations that the bank's "oversight of the banking and designated services provided through its correspondent banking relationships was deficient". The 23 million alleged breaches of anti-money-laundering laws point to a corporation oblivious to its responsibilities in law and a regulator asleep at the wheel.

In Australia, the challenge of allocating and managing water flows in the Murray-Darling Basin is overly complicated. The drought, of course, has focused attention on the basin plan and the adequacy of water flows. But water is a finite resource, and the quantity demanded is seemingly infinite. We could adopt a simple, dramatic solution of abandoning a national agreement to share water, yet this would be a rule-of-the-jungle sort of response. And a halfway-to-good solution is not possible if anger and fear contaminate actions, policies and decisions.

It comes as no comfort to learn that Australia is not alone in finding regulation difficult.

The failure of regulators in the United States to properly regulate the Boeing 737 led to the death of 346 people. As with dodgy cladding, compliance is a matter of life and death.

If governments and regulators are to make a better fist of things and minimise damage and harm by regulation in 2020, then they need to keep essential principles in mind.

The first is that while it is easy to blame regulators for failing, sometimes this is neither helpful nor right. Failure can originate from a broader political, policy or legal framework. Finding a scapegoat is not a regulatory solution.

These days it is fashionable and easy to lay into the Murray-Darling Basin Authority. But it is not clear the authority has the necessary powers or the policy and regulatory framework to effectively oversee the operations of state governments. Nor is it clear that the best way to ensure compliance with the Water Act is, in the first instance, to beef up the role of an inspector-general.

The second principle is that because regulation very often requires detailed understanding of complex scientific, technical or financial matters, good regulators are hard to find and hard to keep. Capricious action by governments can damage the ability of regulators to do good work. In a perfect world, for example, the Australian Pesticides and Veterinary Medicines Authority would have remained intact and staffed with experts in Canberra.

Thirdly, regulators must be credible as enforcers of the law. All regulators have options - they send, for example, a gentle compliance letter reminding a company of their responsibility in law, or they take the company to the Federal Court. But without the promise and threat of hard action, the chances of regulatory success are much diminished.

Fourth, it's important to focus on outcomes. Resist the temptation to launch a high-profile initiative that realises not much more than a flash of cheap publicity. Adjust the regulatory response to maximise the chance of a positive regulatory outcome.

Fifth, Dracula shouldn't always be put in charge of the blood bank. Sometimes industry is sufficiently honourable and mature to regulate itself. Sometimes it's not.

Sixth, deregulation shouldn't be the beginning and end of regulatory policy. The burden that regulators load on the regulated community - the companies and individuals that must comply with a regulatory framework - is only one factor to be considered when determining the optimal regulatory intervention. Regulators must focus on danger, damage and harm by adopting a risk-based approach.

Finally, take courage and don't compromise on what is right. Use the resources and powers defined in law to make Australia a safer and better country.