Kevin Rudd unveiled his ministry in Newcastle on Monday as former trade and regional Australia minister Simon Crean - who was tipped to secure a spot in Mr Rudd's new frontbench - announced he was quitting politics at the upcoming election.

Mr Shorten, who dramatically changed his support from Julia Gillard to Mr Rudd before the leadership ballot last week, will now have responsibility for the school funding reforms.

While Brendan O'Connor, a Gillard supporter, loses the immigration portfolio to Tony Burke, he will take an element of Mr Shorten's old responsibilities - employment - along with skills and training.

"Bill has a strong mind, he also has a strong ability to communicate," Mr Rudd said, explaining this was needed to advocate for the Better Schools plan.

Other Rudd backers have also been rewarded in the new-look ministry.

Joel Fitzgibbon has been made Minister for Agriculture, while Ed Husic and Alan Griffin have been made parliamentary secretaries to the Prime Minister, with Mr Griffin also taking on the role of cabinet secretary.

The reshuffle comes after a number of senior ministers - including Greg Combet, Stephen Conroy, Peter Garrett, Craig Emerson and Joe Ludwig - quit their positions in the wake of the Labor leadership ballot last Wednesday.

Chris Bowen has already been sworn in as Treasurer and Anthony Albanese as Deputy Prime Minister following the resignation of Wayne Swan.

Mr Albanese will take on responsibility for the NBN as Minister for Communications and Broadband. He retains his infrastructure and transport portfolio.

"This is a large set of responsibilities for a man with a prodigious work ethic and a heart for all Australia," Mr Rudd said.

Mr Rudd told reporters in Newcastle on Monday that the core task of government was to "keep the economy strong".

"I have assembled today a strong economic team, one with vastly more experience and vastly more competence than those we face opposite," he said.

Along with Mr Bowen, who was appointed Treasurer last week, Penny Wong keeps her position has Finance Minister.

Assistant Treasurer David Bradbury picks up financial services and superannuation from Mr Shorten.

Another key Rudd backer, Kim Carr, rejoins cabinet with responsibility for innovation, industry, science, research and higher education.

Other winners and losers

In another significant change, with Mr Burke, the former environment minister, taking on immigration, Mark Butler swaps mental health for climate change, environment, heritage and water. Mr Burke will, however, keep the arts portfolio.

Another key Rudd supporter, Richard Marles, will enter cabinet as the Minister for Trade - taking over from Dr Emerson, who is also quitting politics.

Mr Marles had earlier quit his role as parliamentary secretary for foreign affairs after the March leadership ballot.

Melissa Parke, who has worked as a senior lawyer in the United Nations, has been promoted to the ministry as the first Minister for International Development. "Melissa has a passion for this area," Mr Rudd said.

Outspoken Labor Left leader Doug Cameron has been made parliamentary secretary for housing and homelessness.

On Sunday, Fairfax Media reported that the announcement of the new cabinet and outer ministry was delayed as Mr Rudd was not able to fill some crucial roles as quickly as he hoped. Labor sources said a number of ministerial offers were refused and efforts were poured into coaxing some key Gillard ministers back into cabinet.

On Monday, Opposition Leader Tony Abbott said Mr Rudd's new look team "is not even the B team, it's the C team".

When asked if Mr Abbott was planning a Coalition reshuffle, Deputy Opposition Leader Julie Bishop said she didn't believe so.

"While Kevin Rudd rewards those who've been disloyal and dishonest and deceitful towards the Prime Minister ... we in the Coalition have remained steady and calm and measured," she said.

In a surprise move, Home Affairs and Justice Minister Jason Clare has been moved to the outer ministry and loses the cabinet secretary role.

Mr Clare, who has been touted as a future Labor leader, was only recently promoted to cabinet. He waited until the final week of the Gillard government to switch his support to Mr Rudd.

It is understood Mr Clare argued strongly to retain his ministries, especially because he is due to announce major reforms soon to customs and border protection.

Kate Lundy - a strong supporter of Ms Gillard - loses the prized sports portfolio to Senator Don Farrell. Ms Lundy keeps multicultural affairs and will be minister assisting for the digital economy (a new role) as well as minister assisting for innovation and industry.

Another to lose out in the reshuffle was the member for Fraser in the ACT, Andrew Leigh, who lost his position as parliamentary secretary for the Prime Minister.

''My view was that having supported the former Prime Minister in Wednesday night's ballot the honourable thing to do was to offer my resignation,'' Mr Leigh said.

''Kevin accepted that and said he wanted me to play a role on international economic issues.''

Mr Leigh said he would be advising Mr Rudd ''on how changes in the global economy affect Australia's position and the transition of Australia's economy with global commodity process falling''.

Foreign Minister Bob Carr, Attorney-General Mark Dreyfus and Resources Minister Gary Gray all keep their positions. Mr Smith, despite announcing plans to retire at the upcoming election, will continue as Defence Minister.

Mr Rudd's new ministry was sworn-in at Government House by the Governor-General Quentin Bryce on Monday afternoon.

Families Minister Jenny Macklin arrived late to muffled laughter,
smiling sheepishly.

"Would you please stand, not for the arrival of Jenny Macklin, but for
the arrival of the Governor-General," the official said.

Crean quits politics

When announcing the line-up, Mr Rudd acknowledged Mr Crean's departure and his contribution to politics.

The former Labor leader joined Stephen Smith, Ms Gillard, Mr Garrett, Dr Emerson and Mr Combet in deciding not to contest the upcoming election.

Mr Crean has been on the backbench since March this year, when he unsuccessfully called on Mr Rudd to challenge then prime minister Ms Gillard.

Mr Crean, who served as opposition leader between 2001 and 2003, stood in last week's ballot for the deputy leadership, but lost to Mr Albanese.

Mr Rudd said he had spoken to Mr Crean on Sunday.

"He has been an extraordinary leader in our movement for a long time," Mr Rudd said.

Mr Crean said he had turned down an offer to serve in Mr Rudd's new cabinet.

"I welcomed that, but I indicated to him I had come to the decision not to contest the next election and he should take that into account,'' he told Fairfax Radio on Monday.

"I left him essentially the option to use the position to regenerate or if he needed me to plug a gap until the election I was happy to."

Leadership change sees bounce in polls

The reshuffle comes as another poll indicates that Labor has received a significant bounce from its move back to Mr Rudd.

Newspoll shows the Coalition still has an election-winning lead, but the gap has now tightened to 51 to 49 per cent, two-party-preferred.

A ReachTEL poll of key seats published by Fairfax Media over the weekend found that Mr Rudd was preferred prime minister over Mr Abbott, leading 70 per cent to 30 per cent.

Six women in cabinet

Three women have been promoted to cabinet in Mr Rudd's reshuffle.

Julie Collins joins cabinet as Minister for Housing and Homelessness, and Catherine King will retain the regional portfolio.

Jacinta Collins also joins cabinet as Minister for Mental Health and Ageing.

The promotion of Ms King, Ms Collins and Senator Collins bring the total number of women in cabinet to six, with Senator Wong, Ms Macklin and Tanya Plibersek.

''This will the largest number of women in the Australian cabinet in history, and the same for the ministry at large,'' Mr Rudd told Channel Seven on Monday morning.

Asked if he made the appointments because he feared a backlash after he deposed Australia's first female prime minister last week, Mr Rudd replied: ''These are women who are strong, professional, highly experienced and they are there exclusively on their merit.''

Ms Macklin keeps families, disability reform and indigenous affairs and Ms Plibersek adds medical research to her responsibility for health.

with Jonathan Swan, AAP

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