Hockey to Washington

Mr Hockey was replaced as Treasurer by Scott Morison. Mr Hockey had discussed taking Defence with Mr Turnbull but decided against it.

Mr Turnbull all but confirmed the Washington appointment, saying Mr Hockey "has a further contribution to make in our nation's service".

A byelection in Mr Hockey's seat of North Sydney would come hot on the heels of Saturday's by-election in the Seat of Canning which the Coalition won comfortably, despite a swing to Labor of 7 percentage points.

Mr Turnbull has made the selling the economic message his priority and Mr Morrison told The Financial Review he would take the same clinical approach to his new job as he did to his previous tasks of stopping the boats and breaking the Senate impasse over pension cuts.

The Turnbull cabinet.

He committed to continuing with the White Paper processes already underway into tax and federation but indicated he would not be bound by current policy positions so far stated.

Under the cull, Abbott supporters Kevin Andrews, Bruce Billson, and Eric Abetz were also dumped from cabinet while Turnbull supporter Ian Macfarlane was also sent to the backbench.


Winners and losers

The new cabinet has 22 members, above the usual 20, and now includes five women.

Those promoted include NSW Senator Marise Payne, the nation's first female Defence Minister, Kelly O'Dwyer, who takes over small business and assistant treasury, and Western Australian Senator Michaelia Cash who takes over employment and industrial relation.

Former WA state treasurer Christian Porter ws the fastest mover, jumping from the backbench to the cabinet post of social services. Josh Frydenberg was one fo the few Abbott backers promoted. He moved from the outer ministry into Cabinet.

Christopher Pyne moved from education to a new portfolio of Industry, Innovation and Science and Turnbull booster Arthur Sinodinos will move into a pivotal management and watchdog role as cabinet secretary.

Abbott supporters Andrew Robb (Trade), Mathias Cormann (Finance), Greg Hunt (Environment) and Peter Dutton (Immigration) were left untouched.

"Now, this is a process of renewal," Mr Turnbull said.

After being sworn in, the new cabinet will meet in Canberra and be briefed by Reserve Bank Governor Glenn Stevens.


Despite commissioning reviews into tax and Federation, Mr Abbott ruled out many changes such as touching superannuation and negative gearing. He also said there would be no GST increase unless offset by other tax cuts.

Mr Turnbull is giving nothing away but said tax reform, innovation and science must be at the centre of keeping abreast of rapid change.

He took a swipe at Mr Abbott for abrogating all responsibility for public transport to focus on roads. Mr Turnbull appointed Jamie Briggs as Minister for Cities and the Built Environment.

"Integration is critical, we shouldn't be discriminating between one form of transit and another," he said.

"Infrastructure should be assessed objectively and rationally on its merits, there is no place for ideology here at all."



He adopted an idea by Labor's Anthony Albanese by appointing the first Coalition minister for Cities.

Bad blood

The bad blood caused by the leadership spill and subsequent upheaval was writ large when Mr Andrews called a press conference on Sunday afternoon to announce he had been sacked, even before Mr Turnbull unveiled his new line-up.

An angry Mr Andrews said he was disappointed Mr Turnbull "did not accept my offer to work with him", saying it would threaten the security of defence policy.


"Mr Turnbull's decision means there have now been more defence Minsters in Australia than prime ministers in the last three years," he said.

"Defence is meant to be a natural strength for the Coalition."

Senator Sinodinos said the reshuffle and a more consultative prime minister's office should put an end to the leaking which so plagued Tony Abbott.

"This is a healing process as much as anything else," he said.

"If you want to stop leaks, make sure people feel like their opinion is valued and they are in the tent."

He said Mr Turnbull would be "a Prime Minister at the centre of the economic debate" because for Mr Turnbull, the economy was his "bread and butter".

"There's a big transition ahead, we've got to get it right," he said.

Disgruntled conservative Senator Cory Bernardi warned Mr Turnbull could split the Coalition as he did in 2009 when he was Opposition leader.

"If we go back to the days when Malcolm Turnbull was determined to assist Kevin Rudd in putting in an emissions trading scheme, that was as close to seeing a split within the Liberal-National coalition as I've ever seen and I would ever want to see," he said.