Prime Minister Scott Morrison has appointed his former chief of staff as the nation's most senior public servant.

Key points: Scott Morrison appoints his former chief of staff as the head of his department

Scott Morrison appoints his former chief of staff as the head of his department Philip Gaetjens will replace retiring Prime Minister and Cabinet secretary Martin Parkinson

Philip Gaetjens will replace retiring Prime Minister and Cabinet secretary Martin Parkinson He moves from the Treasury Department, which he's led for the last year

Treasury secretary Phil Gaetjens will replace Prime Minister and Cabinet department secretary Martin Parkinson when he retires next month.

Mr Gaetjens was Mr Morrison's chief of staff when he was treasurer, and his appointment as head of Treasury last year attracted allegations of nepotism from the Labor Party.

He was also chief of staff to Howard-era treasurer Peter Costello.

"Phil has 40 years of experience, at state and at federal level," Mr Morrison told reporters in Canberra.

"He's been more closely involved in central agency planning than most people around this town.

"As you know, I've worked closely with Phil in the past, and I'm looking forward to working closely with him again."

Mr Morrison denied he was simply promoting a friend, and said he would give a guarantee he was not politicising the public service.

"In the same way that previous Labor prime ministers have been able to give that same obligation, and accountability, and commitment to the Australian people in the numerous appointments they have made," the Prime Minister said.

"This is not uncommon, that people who've worked in the political sphere and the bureaucratic sphere — because it's both — and where they have that experience, I think it aids them well in the task that they have.

"The public service will rightly, and always do in my experience, be very full and frank in what they say to me as a prime minister and what they've said to me previously as a minister."

Mr Morrison cited previous senior public service appointments, including that of current Home Affairs boss Mike Pezzullo, to senior Defence Department roles under Labor governments.

The retirement of Dr Parkinson has prompted a broader shakeup of senior public servant roles in the nation's capital.

Secretary of the Infrastructure Department Steven Kennedy will take the reins of the nation's Treasury.

There had been speculation current Defence secretary Greg Moriarty had been lined up to take over the Prime Minister's Department.

Former Telstra boss David Thodey is currently undertaking a review of the public service, and the Prime Minister has hinted more appointments could be looming.

Dr Parkinson's retirement comes ahead of his term expiring in 2021.

Dr Parkinson lost his job as the head of the Treasury when Tony Abbott and the Coalition came to power in 2013.

Former prime minister Malcolm Turnbull, after replacing Mr Abbott, appointed Dr Parkinson to run Prime Minister and Cabinet in 2015.