Tony Abbott said: “Mr Fraser brings significant experience in both the public and private sectors to his appointment.

“He is currently Chairman of UBS Global Asset Management and other UBS entities in Australia and internationally. He was Chairman and CEO of UBS Global Asset Management from 2001 to 2013. He has been Chairman of Victorian Funds Management Corporation since 2009,” the Prime Minister said.

The Australian revealed on Friday that Mr Fraser’s appointment was expected today to end doubt about the key economic role in government.

Treasury secretary Martin Parkinson announced his retirement several months ago and will finish on Friday. He had agreed to continue to fill the role until the completion of last month’s G20 leaders summit in Brisbane. Joe Hockey prepared the G20 summit with Dr Parkinson.

Although Mr Fraser was considered the replacement for Dr Parkinson for months, confusion emerged about the management of Mr Fraser’s personal financial situation. But the negotiations and requirements have now been settled.

After the retirements of Dr Parkinson and the head of the Department of Prime Minister and Cabinet, Ian Watt, the government was left without permanent replacements in its top two public service positions.

Michael Thawley started in his job as the head of PM&C last week.

Treasurer Joe Hockey welcomed Mr Fraser’s appointment, saying he was “well placed” to guide the department into a new era.

“As part of undertaking the new role, Mr Fraser will be asked to conduct a thorough review of the Treasury’s resources and capabilities,” Mr Hockey said.

“I look forward to working with John Fraser as we enter a crucial period of economic reform.”

Mr Hockey also paid tribute to Dr Parkinson’s “outstanding contribution” to the public service since he was appointed to Treasury in 1981.

“(Dr Parkinson) has utilised his enormous intellect to pursue and affect significant policy change. He has served the community and the government well through his leadership and insightful advice,” Mr Hockey said.

“Martin Parkinson is a man of great personal integrity. I wish him all the very best for his future endeavours.”

Shadow treasurer Chris Bowen also welcomed Mr Fraser’s appointment and called on the government to fill other vacancies in the Treasury portfolio.

“The Abbott Government should never have broken with long standing Australian political convention and sacked Dr Parkinson,” Mr Bowen said. “Given that has occurred, we welcome Mr Fraser’s appointment as Treasury Secretary.

“The Prime Minister should take the next steps and end the chaos in the Treasury portfolio, by speedily appointing both a Chief Statistician and a full-time Assistant Treasurer.”