Australia's prime minister-elect, Kevin Rudd, has announced the make-up of his new government.

He appointed his deputy leader, Julia Gillard, as education minister, and a former rock star, Midnight Oil singer Peter Garrett, as environment minister.

The Liberal Party has elected outgoing defence minister, Brendan Nelson as its new leader to replace John Howard, who was defeated in last week's election.

He beat the favourite, the outgoing environment minister Malcolm Turnbull.

Kevin Rudd has not yet been sworn in as Australia's next prime minister, but he is impatient to tackle what he describes as the challenges of the future.

In naming his ministry, it is clear that the 'three Es' are his main priority - the economy, education and the environment.

By far the most eye-catching appointment is that of Peter Garrett as environment minister.

Garrett is best known as the former front man of rock group Midnight Oil, who had an international hit with the song Beds Are Burning.

Rudd has also created a new climate change portfolio.

At the same time Rudd announced his new ministry, the Liberal Party has elected a new leader to replace John Howard.