The current levels system will change at the start of 2015. This system will only be in place until the end of the year.
There are two streams in Australia - national stream and International stream. The vast majority of gymnast compete in national stream. A select w who are training for elite gymnastics will train in the international stream.
The national stream has three parts. Levels 1-3, levels 4-6, levels 7-10.
In levels 1-3 all gymnasts will perform the same routine on each apparatus. There are two stages of routines in each level. There are the prep routines and the full routines. There are competitions for gymnasts doing both the prep and full routines. Generally the prep routines are for those do less hours.
Competitions are not compulsory at this stage. So gyms do them and some don't, but most off the option. You can levels test in class and don't need to do a competition to pass.
In level 4-6 each gymnast has their own routine and their own music for floor. There are set requirements for each level skill wise. But the gymnasts can put them in, in any order. Some requirements are very specific ie - must do a round off flic, and others are more general. Ie must do an A or above jump.
In level 4-6 there are bonus skills which can be out into the routine as well, and for each of these you get an additional 0.2 added to your start value. But level 4's can earn only up to 0.4 bonus, level 5's can earn up to 0.6 and level 6 up to 0.8.
From level 4 gymnasts will need to pass their level at a competition to move up to the next level.
The next stage is level 7-10 which are optional routines. This is more like the elite requirements where they get points for how difficult their skills are, for fulfilling certain criteria and for connection bonus's. The routines become much more indidividual. For this stage gymnasts can qualify to compete at nationals.
Then there is the international stream which has 9 levels. IDP 1, IDP 2, IDP 3, IDP 4, IDP 5, IDP 6, IDP 8, IDP 10, junior international and senior international. These levels are generally only trained at high performance gyms. From IDP 1-6 there are set routines on every apparatus which everyone does the same. In IDP 8 you have a set routine but you can fill it with many bonus skills. From IDP 10 gymnasts compete FIg international requirements.
Some states also have another star which is the state stream. But this has nothing to do with the Australian program. It is a choice each state makes.