Bill Shorten, one of the so-called faceless men who engineered Julia Gillard's leadership coup last year, is the biggest winner in her ministerial reshuffle today.

Mr Shorten will move into Cabinet, shifting from Assistant Treasurer into the key Workplace Relations portfolio, with another "faceless man", Mark Arbib, becoming Assistant Treasurer and Small Business Minister.

Nicola Roxon will be Australia's first female Attorney-General, taking over from Robert McClelland, who will remain in an expanded Cabinet as Minister for Emergency Management and Housing.

There will be five women in a 22-member Cabinet, with Tanya Plibersek taking over Ms Roxon's Health portfolio.

Industry Minister Kim Carr, a supporter of Ms Gillard during the leadership challenge, has been dumped from Cabinet but has been given the Manufacturing and Defence Materiel portfolio.

Also demoted is Chris Evans, who has lost Workplace Relations but retains his position in Cabinet with the Tertiary Education, Skills, Science and Research portfolio.

Mark Butler moves into Cabinet with the Mental Health and Ageing role along with Social Inclusion.

Greg Combet, who successfully shepherded the controversial climate change legislation through Parliament takes over Industry from the demoted Senator Carr.

Sydney MP Jason Clare, a member of the influential NSW Right faction, has been promoted from Defence Procurement to Home Affairs.

Former Home Affairs Minister Brendan O'Connor is appointed as Minister for Human Services and Minister Assisting for School Education.

No reward

A new face in the ministry is Tasmanian MP Julie Collins in the Community Services portfolio, meaning the state retains a face in the Government's executive after the resignation of Nick Sherry.

Ms Gillard denied the changes reward her political backers.

"Anybody making that assertion was incapable of logical thought," Ms Gillard told a press conference.

"The key new appointments here are the new appointments into Cabinet.

"Yes, other important changes have been made like Julie Collins coming into the ministry, but I would direct your attention to the people joining Cabinet - Tanya Plibersek, Bill Shorten, Mark Butler."

Of those, only Mr Shorten was actively supporting Ms Gillard during the leadership coup.

Ms Gillard says the changes are designed to provide a "mix of new energy talent and wise heads" in a time of "profound economic change".

"I believe it's the right mix of experience and new blood," she said.

"This new mixture will give us new focus and the fire power we need in 2012 to pursue the Government's priorities."

Resignation

The reshuffle was made possible by the resignation of Senator Sherry, the Small Business Minister, who told Ms Gillard of his decision during the ALP conference a week ago.

He says he resigned to spend more time with his family of three young children and because he had a very long parliamentary career.

"I am fit and energetic, I enjoy being a Minister but when I considered the interrelated factors I came to the conclusion it was time," Senator Sherry told reporters.

But he emphasised the decision was his and his alone.

Ms Plibersek says she is grateful for the opportunity to become Health Minister.

"I think it's really important to have a Cabinet that reflects the diversity of the Australian community, and that means men and women, it means older and younger people, it means people who have had all different sorts of life experiences."

'Buying loyalty'

Opposition Leader Tony Abbott says Ms Gillard had to expand the Cabinet because she could not afford to upset any of her ministers.

"The Prime Minister had to buy the loyalty of the faceless men but she couldn't afford to sack anyone, so now the worst government in Australia's history has the biggest Cabinet in Australia's history," he said.

Mr Abbott says he is not considering a reshuffle of his frontbench, saying he will be taking his present team to the election, unlike Ms Gillard.

"Her problem is that she's got fundamentally bad policy and she's trying to mask the lack of good policy by changing personnel," Mr Abbott said.

"You never rule out change if there are retirements, but I am very satisfied with my team and my team is the team I expect to lead into the election."

Key winners and losers