The decision means Mr Barr is free to shuffle the portfolios among the existing ministers, without having to look to his backbench for now.

Mr Barr plans to keep Treasury. Simon Corbell, who will become deputy chief minister, reiterated on Monday his enthusiasm for the renewable energy portfolio. Assuming he retains that, the big questions are whether he also retains Capital Metro and who gets health – possibly Mr Corbell or Greens Minister Shane Rattenbury.

Mr Barr would not speculate on whether Mrs Fitzharris would go straight into a ministry, bypassing backbenchers Yvette Berry, Chris Bourke and Mary Porter, but indicated no problem with the concept of a new politician becoming an instant minister. He pointed out he had been a minister since he entered the Assembly in 2006.

Mr Corbell and Mr Barr held joint media interviews on Monday, conveying a message of unity. But as Mr Barr pointed out, they represent some of the classic Canberra divides – north (Barr), south (Corbell); Australian National University (Barr), University of Canberra (Corbell); Labor right (Barr), Labor left (Corbell). The men, both in their early 40s, have known each other since their student days, when Mr Barr joined Young Labor aged just 18 and Mr Corbell was its secretary.

Mr Barr said he would have to make some tough budget decisions, but the key challenges would come in the next two years, with the impact of the $1 billion Fluffy buyback expected to have a $600 million hit on the budget bottom line.

He hinted at possible timing changes in the tax reform program, under which stamp duty on house purchases is being phased out and rates are being increased. Asked whether the phase-out of stamp duty could be pushed back, Mr Barr said the rolling five-year program had always contained flexibility.

But with spending restraint, especially in health and education, the budget was on track to balance by the end of the decade.

"You've got a third of the budget [health] growing at about 5 per cent. Education is about a quarter of the budget – it's growing at round the 3 per cent mark. If you can contain the rest of your expenditure growth at around that 3 per cent, it's going to average out over the whole budget at closer to 4," he said. "As long as we can maintain expenditure growth at around those levels and revenue growth at above those then, yes, the budget deficit shrinks each year."

He signalled more asset and land sales and the need to attract new capital to the city.

Asked about light rail, Mr Corbell said he and Mr Barr both felt strongly that the tramline was the right project for the city's future. "It might be tough politically, but you don't shrug off the right decision just because it's tough politically. Leadership is about stepping up and making the case further and being persuasive and consistent in delivering it."

Mrs Fitzharris, who is Mr Barr's chief of staff, confirmed she would nominate for the vacancy in Molonglo created by the resignation of Katy Gallagher, and she is expected by Labor insiders to win on the countback of Ms Gallagher's preferences.

The Electoral Commission doesn't expect to begin that 10-day process until after the Christmas-New Year break, with the result that Ms Fitzharris would not be declared winner until mid to late January.