By chief political correspondent Emma Griffiths
Photo: Bill Shorten speaks after being announced as Labor's new leader. (AAP: Lukas Coch)
Bill Shorten has been elected to lead the federal Labor Party, beating Anthony Albanese in a tight face-off and prompting his mother-in-law, Governor-General Quentin Bryce, to offer her resignation "to avoid any perception of bias".
Mr Shorten won the contest after recieving 52 per cent of the combined vote of caucus and rank-and-file members, who got a say in the party's leadership for the first time.
Federal Labor MPs will meet in Canberra on Monday to decide who will be Mr Shorten's deputy and frontbench team.
The former union boss is married to the Governor-General's daughter Chloe, whom he described in his first press conference as leader as "my most remarkable wife".
Prime Minister Tony Abbott revealed Ms Bryce offered to resign in a statement released shortly after it was announced that Mr Shorten would be Opposition Leader.
ALP vote breakdown
Bill Shorten
Anthony Albanese
Caucus votes
63.95% (55 votes)
36.05% (31 votes)
ALP membership
(About 30k votes)40.08%
59.92%
Overall vote
52.02%
47.98%
Mr Abbott says he declined to accept the offer "due to the fact that [Quentin Bryce] will retire in March next year and that the Government commands the House of Representatives with a significant margin".
"I believe it is only fit and proper that she be permitted to conclude her term and be accorded the appropriate farewell that her exemplary service merits," the Prime Minister concluded.
As the Queen's representative, the Governor-General has final - albeit technical - say over legislation and is responsible for dissolving the parliament when an election is called.
Tanya Plibersek is expected to be voted Mr Shorten's deputy, while Labor MP Richard Marles expects the frontbench to be decided by a combination of the factions with input from the leader.
"It's only appropriate that Bill makes his views in relation to that be known to various people in this process and I'm sure that there'll be a whole lot of discussion around it," Mr Marles said.
"But ultimately this will be an election from the caucus and people will want to vote knowing Bill's preference going forward."
Coalition's carbon challenge
The Government has laid down repealing the carbon price legislation as Mr Shorten's first challenge.
However, the Victorian right-wing MP says that while the ultimate policy position is a matter for his new frontbench and caucus, he will fight to maintain a carbon pricing scheme.
"Failing to put a price on carbon pollution merely delays problems for tomorrow's generation," the new Opposition Leader said.
Some of the leadership disunity in the past is now just that - in the past - and party members have provided us with unequivocal support.
Bill Shorten
Mr Albanese, who has pledged his "total loyalty" to his new leader, has criticised the government as an "opposition in exile".
"I think in the words of that great philosopher Tex Perkins, 'The honeymoon is over, baby,' and it's over ... for Tony Abbott and his team," he said.
The Government has already moved to paint the new Labor leader as the choice of the "faceless men in the factions".
Mr Shorten played a pivotal role in the leadership instability of Labor's years in government, first by backing Julia Gillard to oust Kevin Rudd and then by reversing his support to help return Mr Rudd to the prime ministership.
He says the new process to elect a leader will put an end to such factional power plays.
"Some of the leadership disunity in the past is now just that - in the past - and party members have provided us with unequivocal support," he said.
Who is Bill Shorten?
Bill Shorten's election as leader of the ALP fulfils a long-held ambition for the former union chief.
Photo: AAP
"There is no doubt that Labor's been through some difficult times while it was in Government.
"But what people have with me is someone who will always try and work out what is the best interests of the nation first, and then the best interests of Labor, and that's how I approach my decisions.
"On that basis, I do reasonably expect the support of others, and that's why I was so heartened with such a strong degree of support from my parliamentary colleagues who have watched me over the last six years."
Mr Albanese warned that Mr Shorten "needs to run a disciplined show".
"If anyone steps out of line, he needs to discipline them and I will be there standing by him to assist in that process," he said.
Labor's historic voting process
The leadership process marked the first time the ALP opened up the contest to the party's rank-and-file members, whose 30,426 votes were equally weighted against the 86 members of caucus.
Mr Shorten won the caucus ballot, but Mr Albanese received more support from the branches.
Despite the disparity, Mr Albanese said the election has left the party "stronger and more united than we've ever been before".
"If I can be forgiven for quoting another Italian, Michael Corleone, in Godfather III, 'Real power cannot be given, it must be taken.' It was taken off the factional bosses and given to the rank and file and the rank and file have responded," he said.
"Bill will have the united Parliamentary Labor Party, as well as the membership, behind him over the coming years."
Congratulations to Bill Shorten on becoming Labor leader. A great honour! I wish Bill all the best. JG
— Julia Gillard (@JuliaGillard) October 13, 2013
Former interim leader Chris Bowen, who is likely to be the new Treasury spokesman, conceded some ALP members would be disappointed but said, while there could be some "tweaking", the process is "here to stay".
"This is a very tight result - a very tight result - but it is a result which has the support of the entire party, through the Caucus and through the opportunity to be involved with branch members," he said.
"Now - yes, there will be branch members who will be disappointed that their candidate didn't have a win, but I think they'll be very grateful that they had a say and that they will have a say into the future."
ALP national president Jenny McAllister said weighting the two ballots equally is roughly correct.
But party member and Albanese campaigner, Luke Whitington, is calling for a "one member one vote" system.
"If the party and the people who run the party don't embrace further reform then party members who are energised by this process will start to drop off and leave," he said.
