PM Tony Abbott announces a new honour scheme: knights and dames. Outgoing Governor-General Quentin Bryce is to be the first new dame.

OUTGOING Governor-General Quentin Bryce will be made a Dame and incoming Governor-General, General Peter Cosgrove will be made a Knight, under a new honour the Prime Minister has recommended to the Queen.

Tony Abbott, who had ruled out such an order in December last year, said up to four will be created in any year.

“Knights and Dames in the Order of Australia will be approved by Her Majesty on the recommendation of the Prime Minister,” he said in a statement.

“My intention is that this new award will go to those who have accepted public office rather than sought it; and who can never, by virtue of the office they have held, entirely return to private life.”

He told reporters in Canberra it would be a “fitting recognition” of their service.

Mr Abbott said he had informed Ms Bryce and General Cosgrove of the honour.

“They carefully considered the proposition and both were happy to accept,” the PM reported.

It will add “dignity and stature” to what he said was a very important office, referencing the “grace and style” the outgoing Governor-General has showed during her time in the role.

Ms Bryce’s son-in-law, Opposition Leader Bill Shorten, questioned the announcement.

“It’s good to see the Government has a plan for Knights and Dames — where’s their plan for jobs?” he asked.

“I’m concerned the Abbott Government thinks this is a priority — what about jobs, health and education?”

Earlier today, Bryce said she has had many amazing experiences during the five years she has been Governor-General.

Asked to recall a highlight, Australia’s first female governor-general replied: “Whatever it was I did yesterday.”

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Every day had brought enriching and rewarding experiences where she witnessed the finest human values.

“Generosity, resilience, toughness, courage translated into practice,” she told Tony Abbott during the Prime Minister’s farewell visit to her in Canberra today.

“I have such admiration and respect for ... the selflessness, the accomplishment that I see every day, day after day.

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Ms Bryce finishes an extended term as the Queen’s representative this week, making way for General Peter Cosgrove who replaces her on Friday.

Mr Abbott said her gracious and warm presence would be missed from Yarralumla, the vice-regal residence in the national capital. “Our very best wishes go with you into what I’m sure won’t really be a retirement but it will be a long and productive life after this office,” he said.

As the constitutional commander-in-chief of the nation’s armed forces, Ms Bryce fondly remembered her interactions with the military, especially overnight stays with Australian troops in Afghanistan.

Mr Abbott was astonished, saying he’d never been allowed to stay the night.

“You’re tougher!” he told Ms Bryce.

Their meeting in the drawing room of Government House was the final formal engagement between the pair.

An official portrait of Ms Bryce was set to be unveiled at Parliament House later today.

Ms Bryce returns to her home state of Queensland tomorrow.