Malcolm Turnbull ousts Tony Abbott to become new Australian prime minister

Malcolm Turnbull will become the new prime minister of Australia after ousting Tony Abbott as leader of the ruling Liberal party, which is in coalition with the National party.

Sydney-based Turnbull, a former Goldman Sachs banker, won a leadership ballot with 54 votes to Abbott's 44, with Julie Bishop will remain as deputy prime minister after winning a separate vote.

Communications minister Turnbull had earlier resigned from the cabinet in order to challenge Abbott for the party's leadership as he felt the government was "not successful in providing the economic leadership that we need”.

Abbott was still in the midst of his first term as prime minister, which he began after the 2013 general election saw his Liberal party form a coalition with the National party.

Earlier on Monday, Abbott questioned the reasoning behind a leadership contest: “The prime ministership of this country is not a prize or a plaything to be demanded. It should be something which is earned by a vote of the Australian people."

Turnbull has a more moderate stance on economic policy and is more socially progressive on such issues such as climate change.

Opinion polls have recently indicated that under Abbott the coalition would be defeated in elections due next year. However, Oxford university Rhodes scholar Turnbull is the public’s leading choice for PM.

Aussie dollar reaction

Turnbull’s victory triggered a small uptick in the Australian dollar (AUD) due to relief trading as Abbott’s government had lost popularity in recent months.

"A fresh start is always good as it brings hope. Given his strong curriculum vitae, Turnbull is seen as a potential saviour, the leader that could save Australia from plummeting," said Ipek Ozkardeskaya, market analyst at London Capital Group.

Ozkardeskaya added that Australian voters and investors were keenly hoping for new plans to end the economic stagnation resulting from the commodity slump, with a new vision on the tax system and fresh solutions to facilitate the structural move in the labour market in particular.

"This being said, the difficulties faced by the Australian economy over the past years will also be a concern for Turnbull. The slide in commodity markets, the slowdown in China and the struggle to make structural changes in the economic tissue are his major challenges. And there are no miraculous, fast-track solutions when it comes to structural changes in an environment of global economic depression."