Prime Minister Malcolm Turnbull is urging China to refrain from coercive action following an international court ruling on the South China Sea.

Mr Turnbull says the decision by the Permanent Court of Arbitration in The Hague declaring China having no historical title over the sea must be respected by both sides.

“There is so much at risk in the event of conflict, in the event of heightened tensions, so this is an important decision,” he told reporters in Canberra on Wednesday.

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Foreign Minister Julie Bishop criticised a call from Labor urging Defence to conduct freedom of navigation exercises.

It would lead to an escalation of tensions, she argued.

“I think that’s a highly irresponsible call at this point,” she said.

Meantime, the Turnbull government’s new ministry will be announced early next week.

Mr Turnbull said he would reveal the line-up following party meetings next Monday.

“I expect to announce the new ministry shortly thereafter,” he told reporters in Canberra on Wednesday.

He said it was important to have strong, economic leadership as there was now with the government having been returned with a clear mandate to implement its economic plan.

“We will be presenting our budget measures in the same way … we took them to the election,” Mr Turnbull told reporters in Canberra on Thursday.

Mr Turnbull said without a majority in the Senate, there will be always debate and sometimes compromise.

“We will work openly and constructively with all of the crossbenchers in both houses,” Mr Turnbull said. “This is going to be a very constructive parliament… in the national interest.”