This document consists of the first two volumes of the 1997 annual report on Australia's vocational education and training (VET) system. Examined in volume 1 are the following topics: strategic directions for 1997; overview of the VET system's operation and the Australian National Training Authority (ANTA) agreement; key initiatives in 1997 (the National Training Framework, New Apprenticeships, User Choice, industry advice, improved efficiency and accountability); greater responsiveness (allocation of resources through competitive processes, flexible delivery, the frontline management initiative, professional development, demand for VET, small business, training culture); enhanced quality (best practice and quality assurance, the National Training Framework, and national VET research); improved accessibility (New Apprenticeships, group training, equity and participation in VET, VET in schools, adult and community education); increased efficiency (national key performance measures, national VET statistics, national costing studies, the infrastructure program, promotion of VET); national programs; national projects; and financial information. Appended are lists of 1997 state and territory ANTA board members and National Training Framework committee members. In volume 2, the full range of achievements in VET in 1997 throughout the commonwealth as a whole and in each of Australia's eight states and territories are detailed against the background of Australia's national strategy themes. (MN)