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This is the 12th annual report of the Australian and New Zealand Neonatal Network and presents information on the network’s 2006 annual audit of high risk neonates. All level III NICUs in Australia and New Zealand participate in the networks quality assurance measure. This audit includes information on all babies born at less than 32 weeks gestation or with a birth weight of less than 1500 grams and babies who received assisted ventilation or major surgery. In 2006 there were 6,494 mothers in Australia and New Zealand who gave birth to babies who were admitted to a level III or level II nursery. Among babies born in 2006, 7,592 were admitted to a level III NICU in Australia or New Zealand and 441 were admitted to one of the fifteen participating level II nurseries in Tasmania and New Zealand. These babies made up 2.2% of the 339,271 live births in the two countries in 2006.