Prime Minister Tony Abbott has announced that John Fraser will replace Dr Martin Parkinson PSM as Secretary of the Treasury, effective from 15 January 2015.

The formal appointment, made by the Governor General today, ends several months of speculation over who would take up the crucial public service position after the Abbott government effectively drew a line under Dr Parkinson’s position continuing shortly after the election.

The announcement comes as internal friction with in the Coalition rises over growing electoral hostility to Treasurer Joe Hockey’s first Budget.

The government is expected within days to release a Budget update that will show a further deterioration in the government’s fiscal position amid falling iron ore prices that are expected to hit revenue hard.

Mr Fraser is presently currently Chairman of UBS Global Asset Management as well as other UBS entities in Australia and internationally.

Mr Fraser was also Chairman and chief executive of UBS Global Asset Management from 2001 to 2013 has held the role of Chairman of Victorian Funds Management Corporation since 2009, according the Prime Minister’s announcement.

Mr Abbott paid tribute to Dr Parkinson’s truncated career as Treasury chief as well as his highly respected achievements in the Australian Public Service.

“Dr Parkinson has had a long and meritorious career within the Australian Public Service including appointments as the Secretary of the Treasury and Secretary of the Department of Climate Change,” Mr Abbott said.

“On behalf of the Government, I thank him for his service to Australia and look forward to his further contribution to our country.”