The move follows the disastrous failed internal leadership spill that saw Kevin Rudd supporter Martin Ferguson step down from the role on Friday.

Prime Minister Julia Gillard announced the appointment at a press conference in Canberra yesterday.

“He has been a tireless advocate for business in his own community and in Western Australia, and will bring that purpose to promoting the interests of the tourism sector and small business,” she said.

Gray, the member for Brand, will also serve as Minister for Tourism and Minister for Small Business.

His current roles of Special Minister of State and Minister for the Public Service and Integrity will be adopted by Attorney-General Mark Dreyfus.

Gray has resources experience, as a former senior executive with Woodside Petroleum.

The minister was also a driving force behind the decision to allow Hancock Prospecting to bring in 1700 foreign workers to help in construction of its Roy Hill iron ore project in the Pilbara.

Minerals Council of Australia chief executive Mitch Hooke said his group looks forward to working with Gray to ensure Australia retains its competitive edge in minerals resources exports.

“Mr Gray has a detailed understanding of the resources sector, both in a public policy and private sector capacity,” Hooke said.

Reg Howard-Smith, chief executive of the Chamber of Minerals and Energy of Western Australia, hailed the appointment, saying that Gray is well known to the Western Australian resources sector.

“It is good news that the important Resources and Energy portfolio has been given to a Western Australian, given the Western Australian resources sector accounts for 46% of Australia’s national merchandise export income,” he said.

Australian Mines and Metals Association chief executive Steve Knott said Gray was highly regarded in the sector, particularly in light of Gray’s recommendations from his time on the National Resources Sector Employment Taskforce in 2010.

“Some of Mr Gray’s taskforce recommendations, including increasing the number of women in the resources workforce and transitioning skilled tradespeople into resources-related roles, are initiatives AMMA is actively engaged in,” Knott said.

“As a Western Australian and a former executive with Woodside Petroleum, Minister Gray should bring a strong understanding of the booming offshore oil and gas industry to the role, including the need for the sector to remain competitive and sustainable in the long-term.”

The Association of Mining and Exploration Companies chief executive Simon Bennison congratulated Gray on his appointment, saying his experience will be invaluable in addressing the issues facing the industry.

“He is certainly capable of managing the portfolio and has an excellent rapport with industry,” he said.

AMEC said it had prepared a federal policy platform with recommendations for the government, including a minerals exploration tax credit to alleviate some of the burden on smaller mining and exploration companies.

“AMEC is looking forward to working with the new minister to ensure these recommendations are implemented,” Bennison said.

Michael Roche, chief executive of Queensland Resources Council, said Gray would be well received by the minerals and energy sector in Queensland.

“Minister Gray has a unique understanding of the political process and our sector through previous roles at national secretary of the ALP and as an executive with a major West Australian-based resources company,” he said.

Anthony Albanese has also been promoted, taking over Simon Crean’s role as Minister for Regional Development and Local Government. Craig Emerson has added Minister for Tertiary Education, Skills, Science and Research to his portfolio, while Jason Clare was promoted to the cabinet and will retain his current responsibilities.

Oil and gas industry group APPEA welcomed the appointment and said there was work to be done.

Chief executive David Byers said Australian oil and gas project costs were among the highest in the world. He said there was a need for a predictable and competitive taxation as well as a more efficient regulatory approvals process.

“APPEA also looks forward to meeting with Minister Gray to discuss work underway to develop the skilled workforce and local industry supply capability needed to build and operate all of the projects now under construction, as well as what can be done to reverse the decline in labour productivity growth that Australia has experienced in recent years,” he said.