This document contains the first two volumes of a three-volume annual national report on Australia's vocational education and training (VET) system. Volume 1, which constitutes approximately 30% of the document, details progress in achieving the following national priorities: (1) a quality national training system that provides value for money (achieve quality outcomes cost-effectively; achieve effective outcomes through implementation of the National Training Framework, quality assurance, and risk management; and improve national consistency); (2) industry commitment to skill development (foster a learning culture within enterprises; increase industry participation and investment in training; and expand New Apprenticeships); (3) meeting the needs of individuals as learners (target products and services to meet learner needs; increase opportunities and improve outcomes for targeted groups; and improve and increase pathways of VET in schools); (4) VET professionalism (build the capabilities of VET's professional staff); and (5) support for regional development (target skill development to meet local enterprise, small business, and community needs). Information about reporting through other programs and program funding is included. Overviews of system planning and policy mechanisms are appended along with selected board and advisory committee membership lists. Volume 2 details each of the individual states' and territories' progress in achieving the national priorities. (Contains 22 tables.) (MN)