CANBERRA (AFP) - Prime Minister-designate Malcolm Turnbull said on Monday (Sept 14) he expects "parliament will serve its full term" as he vowed to bring economic vision to Australia after defeating Tony Abbott in a party leadership ballot.

Turnbull, who won the Liberal Party vote 54-44, said his government would focus on "freedom, the individual and the market" and he would run his cabinet by consultation and collaboration.

"This has been a very important, sobering experience today. I'm very humbled by it," he said, referring to the vote. "We need to have in this country and we will have now, an economic vision, a leadership that explains the great challenges and opportunities that we face."

Abbott, who came to power in a decisive general election victory in 2013, was forced into a leadership ballot among his Liberal Party colleagues after Turnbull said the coalition government faced defeat without change at the top.

Seen as more socially progressive than Abbott, who has resisted moves towards legalising gay marriage, Turnbull said he intended to maintain the government's current stance on issues such as climate change.

But he said that under Abbott, the government had been unable to explain its policies adequately to voters and he wanted to signal a new way forward.

"The Australia of the future has to be a nation that is agile, that is innovative, that is creative," he told reporters in Canberra, with Foreign Minister Julie Bishop by his side.

Bishop, who had reportedly sided with Turnbull to call on Abbott to quit earlier in the day, retained her position as deputy leader of the Liberal Party by 70 votes to 30.

In the current parliament, whoever leads the Liberal Party becomes prime minister as head of the conservative coalition in which it is the senior partner.

Ruthless coups

Australian politics can be brutal and it is not the first time in recent years that a prime minister has been removed by a party room coup.

Turnbull previously led the Liberal Party in opposition before being ousted by Abbott in late 2009.

Abbott then lost the 2010 national election to Labor's Julia Gillard, who had ousted her own leader Kevin Rudd in a ruthless party room coup just weeks earlier.

Gillard was similarly knifed by Rudd ahead of the 2013 election, meaning that the prime ministership went from Rudd in 2010 to Gillard and back to Rudd ahead of the 2013 poll won by Abbott.

The so-called revolving door for Australia's top political position has now led to Turnbull.

Moves against the unpopular Abbott had been in the works for months.

He survived a leadership challenge in February after poor polling, policy backflips and an unpopular budget generated a backbench revolt, fuelled by questions about the prime minister's judgement.

No challenger emerged at that time, after a vote on whether there should be a leadership contest was defeated 61 to 39.

But in the months since, Abbott has failed to turn around the polls, bolster the economy or stop damaging leaks from within his party.

Turnbull, a former barrister and entrepreneur who represents an upmarket Sydney electorate, argued earlier Monday that the government's message was not getting through and that a new, more open, approach was needed.

The popular minister, long considered one of the most credible alternatives to Abbott, quit the cabinet in a shock move that triggered the party ballot.

In announcing his challenge, Turnbull said failure to change would mean losing power to Labor leader Bill Shorten at the next election, which is expected to be called some time next year.

He said Australia needed a style of leadership "that respects the people's intelligence, that explains these complex issues and then sets out the course of action we believe we should take".

"We need advocacy, not slogans," he said.

The Labor Party has enjoyed a solid lead over the government since last year, with a Newspoll survey last week finding 63 percent of voters dissatisfied with Abbott's performance.