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The vote was the second challenge this week to the leadership of Malcolm Turnbull who himself assumed office by leading a party revolt in 2015.
Morrison, 50, who has been serving as the country’s treasurer, defeated former home affairs minister Peter Dutton by 45 votes to 40 at the closed door leadership vote. Morrison will lead the conservative party, which is known as the Liberal Party, in a general election expected in the coming months.
He had backed Turnbull earlier in the week, but he later emerged as a more moderate alternative to Dutton, known for his hard-line stance on immigration. Dutton had mounted an unsuccessful leadership challenge on Tuesday.
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The deputy leader Julie Bishop, who has been serving as foreign minister, also lost her position to Victorian Josh Frydenberg who defeated Greg Hunt and Steve Ciobo with an absolute majority. Since 2007, no Australia prime minister has faced two consecutive elections.
Turnbull said on Thursday he would step down and leave the parliament following the vote, potentially cracking the government’s slender one-seat majority and leading to a byelection or even a general election.