Rudd's new Ministry is ambitious and credible with a blend of renewal, promotion and experience. Wong and Garrett will present a credible and appealing team on the environment and climate change; Faulkner will be a steadying hand as Cabinet secretary and Vice President of the Executive Council. Debus is a very credible new Home Affairs Minister and special mention of business deregulation in portfolio responsibilities is very smart.

Big winners receiving promotions today include Stephen Smith who has moved up into the coveted foreign affairs position and Penny Wong, long considered one of Labor's most talented Senators, ascending to the high profile climate change portfolio. Maxine McKew has also been rewarded for defeating Howard in his own seat, with the PM's Parliamentary Secretary position.

Julia Gillard has accepted a 'super ministry' comprised of Education, Employment and Workplace Relations. Though she will have the support of PM Parliamentary Secretary Maxine McKew and a junior Minister, it will still be a massive job to implement Labor's IR policy, and sell the sexier 'education revolution' with all its ascendant campaigning opportunities.

Successful Parliamentary tactician Anthony Albanese also takes on a mammoth job with Leader of the House, Infrastructure, Transport and regional development. He'll be earning lots of frequent flyer miles as he visits all of Labor's new regional electorates.

The Defence portfolio has a few new players with Greg Combet taking responsibility for procurement as a Parl Sec, former Army Colonel Mike Kelly also takes on some as yet unspecified Parl Sec duties. Fitzgibbon remains as Minister, supported by new Ministry entrant Warren Snowden.

The losers are mostly from the left or centre independent including Kate Lundy, Kerry O'Brien, Jan McLucas, Laurie Ferguson, and Bob McMullan. However two of the winners - heavyweights Senator John Faulkner and former New South Wales minister Bob Debus are senior figures in the NSW left.

CABINET AND MINISTRY

Kevin Rudd MP, Prime Minister

Julia Gillard, MP, Deputy Prime Minister; Education; Employment and Workplace Relations; and Social Inclusion

Wayne Swan MP, Treasurer

Senator Chris Evans, Leader of the Government in the Senate; and Immigration and Citizenship

Senator John Faulkner, Special Minister of State; Cabinet Secretary; and Vice President of the Executive Council

Simon Crean MP, Trade

Stephen Smith MP, Foreign Affairs

Joel Fitzgibbon MP, Defence

Nicola Roxon MP, Health and Ageing

Jenny Macklin MP, Families, Housing, Community Services and Indigenous Affairs

Lindsay Tanner MP, Finance and Deregulation

Anthony Albanese MP, Infrastructure; Transport and Regional Development; Local Government; and Leader of the House

Senator Stephen Conroy, Deputy Leader of the Government in the Senate; and Broadband, Communications and the Digital Economy

Senator Kim Carr, Innovation, Industry, Science and Research

Senator Penny Wong, Climate Change and Water

Peter Garrett MP, Environment, Heritage and The Arts

Robert McClelland MP, Attorney General

Senator Joe Ludwig, Human Services; and Manager of Government Business in the Senate

Tony Burke MP, Agriculture, Fisheries and Forestry

Martin Ferguson MP, Resources and Energy; and Tourism

OUTER MINISTRY

Bob Debus, Home Affairs

Chris Bowen MP, Assistant Treasurer; and Minister for Competition Policy and Consumer Affairs

Alan Griffin MP, Veterans’ Affairs

Tanya Plibersek MP, Housing; and Status of Women

Brendan O’Connor MP, Employment Participation

Warren Snowdon MP, Defence Science and Personnel

Craig Emerson MP, Small Business, Independent Contractors and the Service Economy; and Minister Assisting the Finance Minister on Deregulation

Senator Nick Sherry, Superannuation and Corporate Governance

Justine Elliot MP, Ageing

Kate Ellis MP, Youth; and Sport

Today also brings us the much-awaited news of who will lead the Liberal party into this next term as they serve in Opposition. With Brendan Nelson at the helm and Julie Bishop as first mate, the Liberal Party is now set to sail into Opposition. The complete Coalition leadership crew will be established on Monday, when Warren Truss is to be confirmed as the new National Party leader. 

Dr Brendan Nelson

Who would have thought a former earring-wearing member of the Labor Party would one day be elected Leader of the Liberal Party?

Since entering the Federal Parliament as the Member for the Bradfield on Sydney’s North Shore in 1996, Dr Nelson has been a prodigious worker of the Liberal Party backbench and that effort has been rewarded with his narrow leadership win today over the more fancied Malcolm Turnbull. Conscious of the need to eliminate ongoing internal party division, it was a smart move to announce Turnbull’s new key role as Shadow Treasurer, not to mention a case of putting the most adept person into that vital position.

Nelson has been a high profile and generally effective Education and then Defence Minister over the last six years, but he kept a very low profile during the recent election campaign. The former Tasmanian GP, who turns 50 next year, will be drawing on all his political experiences from his time as head of the Australian Medical Association in the early 1990s to lead the dejected Coalition.

Julie Bishop

The Liberals now have their own version of Labor’s Deputy Prime Minister, Julia Gillard. Julie Bishop, 51, from Perth, was today elected the Liberal’s first female Deputy Leader.

Adelaide-born Bishop was a managing partner of Clayton Utz before winning the seat of Curtin in the 1998 election. A prominent Costello-supporter, former Prime Minister John Howard ensured Bishop served a lengthy apprenticeship on the backbench before promoting her to the Ageing portfolio in late 2003 and then into Cabinet as Minister for Education in 2006.

Bishop is a confident media performer and very quick with a brief. As the new Shadow Minister for Industrial Relations she is tasked with the challenge of devising a post-WorkChoices policy which appeals to the Howard Battlers who deserted the Liberals at this election.

Warren Truss

Former Trade Minister, Warren Truss, will complete the Coalition leadership team with Brendan Nelson and Julie Bishop next Monday when he is confirmed as the new National Party Leader when that party meets for the first time since the election.

Truss, the 59 year old farmer from Kingaroy, was first elected back in 1990, for the Queensland seat of Noosa-based Wide Bay. He has ten years experience as a Minister in a range of portfolios including Community Services, Agriculture, Transport and most recently, Trade.

Truss is a solid, but not spectacular, performer, who will now be tasked with restoring the National’s brand in his home state of Queensland and in Northern NSW, where they lost their most support last weekend.

With the Ministry announced, questions arise as to the fate of some of the Secretaries of those Departments that are being split or amalgamated. Although PM-elect Kevin Rudd has said he would not engage in wholesale sacking, there will be some significant changes in responsibilities as a result of the new Ministerial portfolios. Rudd said today that he hoped the PM&C Secretary would see out his contract until the end of the year when he will retire. As for the other Agency heads - here's a quick snapshot of the changes to portfolios.

Based on the 1st Rudd Ministry, we will see a 'super ministry' for Deputy Leader Julia Gillard MP supported by the education and training elements from the Department of Education, Science and Training (DEST), and the Department of Employment and Workplace Relations (DEWR). Although mega-departments have been formed in the past, most think it would be too unwieldy and highly unlikely for the two departments to amalgamate. It is unclear how this arrangement would work for the agencies and the current incumbents Lisa Paul (DEST) and Peter Boxall (DEWR). But what is clear, is the enormous task that lay ahead in implementing the Labor 'education revolution' and industrial relations reforms. What is clear is that three current Government agencies: the Fair Pay Commission, the Office of the Employment Advocate and the Office of Workplace Services, will be consolidated into Labor's Fair Work Australia along with the Australian Industrial Relations Commission. However OTR thinks this will be one area where some of the Howard Government ideologues are asked politely to move on.

The science element of DEST will join together with return to an innovation, industry, science and research portfolio under Senator Kim Carr.

The current Environment and Water Resources Department (Secretary David Borthwick) may share two Ministers - Senator Penny Wong, who has responsibility for Water along with Climate Change, and Peter Garrett MP who leads environment and heritage along with the arts.

The Department of Communications, IT and Arts (Secretary Patricia Scott) will, with the exception of the arts, come under a new portfolio 'Broadband, Communications and the Digital Economy' with Senator Stephen Conroy at the helm.

The portfolio of Health and Ageing (Secretary Jane Halton) will remain unchanged.  The portfolio of Families, Community Services and Indigenous Affairs (Secretary Jeff Harmer) will take on another element - Housing - under Jenny Macklin. Tanya Plibersek will picks up Housing and Status of Women in the outer ministry.

The creation of a new Minister for Home Affairs in Bob Debus is an interesting development. Traditional in the Westminster role, Home Affairs is the original second half of Government (Foreign Affairs the first half) and from that the rest of domestic Government grew and specialised in the UK about 250 years ago. It remains to be seen what the Australian version will look like but it may mean all the federal remnants of things like policing, community safety, drugs, counter-terrorism, and customs that aren't specifically covered by other portfolios will become part of this ministry. The possible equivalent in the former Government is Justice and Customs.

The Departments of Finance, Treasury, Defence, Attorney-Generals and Health and Ageing, and Veterans Affairs will not change. Although the retention of Human Services (Secretary, Helen Williams) was much speculated, it remains with a mandate to achieve taxpayer savings and reforms. One rumour doing the rounds is that the back-office functions of Medicare Australia will merge into Centrelink which in OTR's view makes a lot of sense.

Throughout the campaign, a raft of new Commissions, Offices, taskforces and positions were announced. The details of where these agencies will sit in the Ministry and which public servants will head-up those agencies are still to be announced.

Stay tuned for more!

It is clear from the Ministry makeup that merit; performance and experience, whilst important are not the only criteria Rudd has used. Despite claims that the factions are dead under Rudd, the factional balance has remained with some under-performers protected from the cull.

It also seems that Rudd has chosen to reward those who delivered him the numbers in the leadership ballot with Joel Fitzgibbon keeping Defence and Arch Bevis, the only other member of Rudd's faction but who remained loyal to Beazley being dropped from the Ministry.

Backbench promotions include Victorian Brendan O'Connor, South Australian Kate Ellis and Justine Elliot from New South Wales. O'Connor is very close to Gillard and may have been traded for Ferguson. There are also arguably other backbenchers that have performed more strongly than O'Connor, Snowden and Ellis.

However, it's interesting to note that Queensland doesn't seem to be enjoying an increased quota of Ministers or Parl Secs in line with the huge increase of seats delivered by the Sunshine State. Labor has picked up Leichhardt and Dawson and looks likely to get Herbert and Flynn, yet have demoted North Queensland based Senator Jan McLucas to a Parliamentary Secretary.

The Labor party has certainly verified their win with the number of seats held by the new Government now standing at 81. However, the Liberals, now holding 50 seats, have been making numbers up rapidly in some unexpected seats that are still undecided. The Nationals currently have ten and the Independents hold two.

Whilst the ALP are still very slightly ahead in the Northern Territory's Solomon, with only 81 percent of the votes counted and previous Liberal Member Dave Tollner making up around 300 votes just yesterday (mostly from overseas military votes), the Liberals hopes have been raised just a little. In the Western Australian seat of Swan, previously held by the ALP, the Liberals are now marginally ahead, receiving a 0.2 percent swing with 83 percent of the votes counted.

Up north, Queensland's new seat of Flynn is looking good for Labor's Chris Trevor who is ahead of the Nationals' Glenn Churchill by a couple of hundred votes. However, the seat of Dickson in the sunshine state sees Peter Dutton just in front of his Labor opponent. In Herbert, Liberal Peter Lindsay is still a little behind.

In Bowman, there has been an 8.9 percent swing to the ALP with 87 percent of votes counted. This could mean another seat lost for the Coalition, with Labor's Jason Young now marginally in front.

Sitting Liberal MPs are leading in one remaining seat each in New South Wales, Victoria and Western Australia. Keep up to date on how your seat is looking the ABC's Interactive Electorate Map.

Whilst some are describing Labor’s victory courtesy of a 6% swing as a ‘Ruddslide’, there can be no doubt that the win was emphatic and consistent in all parts of the country bar Western Australia. Labor looks set to enjoy a majority of similar proportion to the Coalition’s pre-election lead of approximately 16 seats.

The ousting of a sitting Prime Minister has only served to punctuate the depth of desire for change.

As of Sunday afternoon, Labor has 83 seats, the Coalition 58 seats and independents 2. There are seven seats as yet undecided, but many are predicting that it will ultimately fall 86 Labor, 62 Coalition and 2 independent, giving Labor a 22 seat margin in the First Rudd Government.

The 1996 Howard Battlers from NSW and Queensland deserted the Coalition and emphatically swung in behind Kevin Rudd. The Ruddites, composed in the main of blue collar males and single mothers, gave effect to Labor’s key messages on WorkChoices and welfare. Importantly, Labor’s broader campaign message was consistent and reassuring with relatively few stuff-ups along the way.

By contrast the Coalition campaign was somewhat bi-polar in its messaging combining the ‘things have never been better’ Go For Growth message with the contrasting cries of there being economic tsunamis on the horizon under a Labor Government. It was always a tough and inconsistent message to sell to the electorate, not helped by various Government Ministers creating frequent campaign headaches along the way.

For Andrew Parker’s analysis of the results, click here.

It's time to go and find your copy of P&P's 'Lobbying Kevin 07' with Labor winning victory with their biggest two party preferred swing since 1969. They have picked up seats that even the most optimistic pundits didn't expect Labor to win. Keep an eye out for your new, updated post-election version of LK07 in the Christmas mail.

Last night Kevin Rudd confirmed P&P’s assertion that he would be a consensus Prime Minister in the Bob Hawke mould - promising to govern for all Australians. Rudd has also presented himself as a modernist saying that Labor will not be fighting the ideological battles of the past and will transcend the traditional right and left divide. In theory this means that to Rudd, the factions of the Labor party will also diminish in importance. However the factions have not been based around true ideological divisions for quite some time and are more a vehicle for power sharing within different sections of the party. So it's difficult to see this role really reducing over time when it is the power of Government rather than the spoils of Opposition that are being divided.

In the first test for the factions, speculation abounds as to the composition of the new Labor Cabinet. Kevin Rudd has stated unequivocally that he will pick the Ministry based on performance, with this Thursday’s caucus meeting subsequently approving the Ministry he has chosen, however this approach would appear to diminish the traditional role of the factions in choosing the front bench. Even if a traditional caucus ballot were to be taken, Rudd’s win has delivered him the leeway to exert considerable influence over those factional choices. Rest assured, whatever the process, the interests of the different sections of the party will still be taken into account and balanced.

Whilst Rudd can certainly assume the personal mantle of “victor” over and above the ALP more broadly; there is no doubt that WorkChoices – and the way it portrayed the Howard Government - became the largest single issue moving voters across to Labor, and the union movement will rightly claim credit for this via its concerted and effective campaign over the last three years. As the different unions align with the various party factions, it seems unlikely that any would allow themselves to be sidelined in the deliberations as to who is deserving of a Ministry.

P&P thinks the most likely outcome will be some frantic behind the scenes negotiations that will see Rudd able to publicly claim a Ministry he has hand picked, but nevertheless one which balances the important factional interests of the caucus. In reality it makes little difference whether the caucus influences Rudd or whether Rudd influences caucus, for in politics perception is everything and Rudd will be seen to have a Ministry of his choosing.

No matter how the Cabinet spoils are divided, Julia Gillard, as Australia’s first female Deputy Prime Minister will achieve another milestone in being called upon to act as PM whilst Kevin Rudd attends the Bali Climate Summit in early December.

Kevin Rudd has a lot to do in his first 100 days and immediate control of the Senate would have been a windfall to Labor.

ACT Liberal Senator Gary Humphries managed to fulfil his important role on Saturday and hold off a challenge from the Greens Kerrie Tucker. Unlike the States, the Territory Senators are up for election at each general election and immediately take their place in the new Parliament and what was at stake for the Coalition should Humphries have lost was its Senate majority. The new Senate does not commence until 30 June 2008.

Not attaining Senate control will frustrate and annoy Labor given it has some ambitious reforms planned. The Coalition’s Senate stalwart Nick Minchin in responding to a question last night on whether the Coalition will oppose its WorkChoices-rollback legislation and other Labor election promises in the Senate, reminded us that Labor opposed the GST and Telstra legislation in the Senate when the Coalition took these policies to the electorate. A frustrating 6 months lie ahead for Labor and loud calls of ”mandate” and “undemocratic behaviour” will no doubt be heard from Labor Ministers in the first two Parliamentary sittings.

The post June 2008 Senate also looks like a nightmare for Labor with the Coalition likely to have 37 seats, Labor 32, Greens 5, Family First 1 and South Australia’s No Pokies Nick Xenophon. In this scenario, the Coalition requires the support of only one additional Senator to block any Labor legislation. Or to put it another way, Labor will need the Greens, Family First and Xenophon to get any legislation up – a brave new world indeed. Labor should be ok with its IR legislation under this scenario, but everything else looks to be a battle. Other than IR, there is little commonality between the policy platforms of the Greens and Family First.

Opposition is hard work. As the now former Coalition Ministers awake today, at least three years in the wilderness (and probably more likely six or nine) is going to seem like a long and unpleasant time.

Ministers like McGauran, Ruddock and Downer have been in Parliament a long time and the thought of working in the under-resourced confines of the Opposition benches might just be too tiring a thought to consider.

Costello has been the first to drop - saying today that he will not contest the leadership, will stay on the backbench for the next three years and then retire from parliament altogether. OTR expects that Costello will not stay the term and along with a few other senior Ministers like Downer will follow leading to a number of by-elections within the next 12-18 months. The timing of such departures will be critical; the last thing the Liberal Party needs in seats like Higgins or Mayo is a further swing against it – and being forced to a by-election does tend to irritate the local punters.

With Costello declining the leadership – gone is the chance of a smooth transition to a new leader. Ambitious front benchers such as Turnbull, Bishop, Nelson and Abbott will already be canvassing numbers. Much of this will be done behind closed doors - the Coalition does not need a messy and public leadership battle on top of yesterday's monumental defeat.

Whoever does take over the Liberal Party leadership is inheriting a train wreck. Not being in power in either the Commonwealth or any of the States or Territories means that the Liberal Party has a distinct lack of influence and resources. Fundraising will be very hard and staff retention even harder. The Coalition's staffing entitlement will now shrink by about 80% and a lot of good political and policy nous will leave the party machine for an extended period of time.

The one shining light from yesterday's disaster is that the Coalition may still have a good degree of influence in the Senate (see Senate section in the OTR today).

The Coalition will enter a long and dark period of introspection, examining what went wrong and why the Australian population decided to remove a Government when the economic circumstances were so positive. Expect the media and numerous other academic types to now predict the end of the Liberal Party as a political force but OTR would remind readers that this was said of Labor after their last Federal election defeat and of the Liberals just before they won in 1996.

The end is in sight and the Howard and Rudd teams are running hard to the line in the knowledge the outcome will be close, very close. Newspoll have pegged the election as a cliffhanger - we may go to bed tomorrow night not knowing whether John Howard or Kevin Rudd will be hanging the Christmas decorations at the Lodge this year. The nation’s Sunday newspaper editors won’t be getting much sleep as they prepare multiple versions of their front pages – “Ruddslide”, “He’s Back” or “…and still counting” - and wait until the very last minute to go to print.

One group of Australian’s not revelling in the excitement of the campaign is the small business community whose confidence has taken a record fall to its lowest level in six years, mainly around concerns about changes to IR laws.

This morning Kevin characterised the status of his famous climb up Everest as being at “above the snowline,” but he’s well aware of “another bloke climbing on the other side” who’s racing him to the peak. As we head to our local schools and church halls tomorrow and take those stubby pencils in hand we’ll get to decide which climber plants the flag on the summit. At P&P we are split on who that will be, but one thing’s looking more and more certain – it will be a narrowly contested scramble to the top.