In Australia our shipping charges are very high, example I have a product worth $11.30 Free Shipping, I send via Regular Post at a cost of $3.60, instead of tracking label $10.60 as you can see I would go backwards
Etsy must and needs to have a dropdown "no tracking" so our very hard work as a seller does not affect our Star Badge. Please look at this urgently
We send all goods under $50 via regular post and is insured under our business insurance if goods go missing.
Etsy will not change the definition of tracked shipping just because it costs we Aussies so much more to ship tracked.
If the order value (before shipping) is under $15 AU, you can ship without tracking and the order will not count against you for SS. If it is $15 or over, you need to track the package. I presume you are shipping via letter mail, as parcel mail has tracking included. In this case, you can use a prepaid tracked letter from Auspost, there are two or three sizes. I use the largest size which takes standard A4 sheets without having to fold and costs just over $6. I think the smaller size (business letter size) is around $4 and there may be a mid size one in between those. I send my domestic label orders in these. They are sturdy cardboard, so it is harder for the postie to fold them and cram them into the letter box (lol), and they are fully tracked.
Full details here: https://auspost.com.au/sending/send-within-australia/compare-letter-services/letter-tracking
I also use the tracked letter mail from Aust Post, however have found that you must make sure that the information in your completed order section is changed to Aust Post tracking as Etsy thinks it is FedEx and it will never be marked complete.