Australian Prime Minister Tony Abbott, battling a slide in public support, reshuffled his Cabinet on Sunday, promoting the overseer of a tough immigration program and throwing out his gaffe-prone defense minister.

Abbott said the shake-up was for jobs and families and stressed a focus on financial issues as he deals with the fallout of an unpopular belt-tightening budget.

"It is a sign that this government wants the economy to be front and center in the coming year," he told reporters.

Abbott is nearing the end of his first full year in office, which has been marked by missteps and a souring economy that have dragged his approval ratings to historic lows.

Faced with a collapse in commodity prices and an unruly upper house Senate, which has held Abbott's first budget hostage since May, voters have abandoned his conservative government more quickly than any other in three decades.

The elevation of Immigration Minister Scott Morrison to social services minister underscored the shift in priorities away from the secretive program of "turning back the boats" of thousands of asylum seekers that helped it win power a year ago.

That policy has been criticized by the United Nations, but Abbott lauded Morrison as "the master of difficult policy and administration" for almost entirely stemming the flow of boats during the past year.

"He is a tough and competent political operator," Abbott said of Morrison. "He's also a decent human being."

'Build a canoe'

Defense Minister David Johnston lost his job in the reshuffle, a month after he embarrassed the government with comments critical of government-owned shipbuilder ASC, saying he did not trust it to "build a canoe".

The comment fueled expectations that most of the work in a $32.6 billion submarine program will go offshore.

Reuters reported in September that Australia want to buy up to 12 off-the-shelf stealth submarines from Japan.

Morrison will be replaced by Peter Dutton, a former police detective, as the minister for immigration and border protection. Johnston will be replaced by Kevin Andrews.

Abbott also appointed a second woman to his Cabinet, following criticism of a lack of female representation.