Peter Dutton's first big policy pitch has been rubbished by Prime Minister Malcolm Turnbull and Treasurer Scott Morrison, as the Liberal leadership aspirant's economic credentials came under heavy scrutiny from his former cabinet colleagues.

Treasurer Scott Morrison said Mr Dutton's plan to cut GST from household electricity bills was an "absolute budget blower" and could cost the budget $7.5 billion over the next four years.

Mr Turnbull said the proposal was "very expensive" and dismissed the prospect of reaching a compromise with the states to reimburse them for the billions of dollars in lost revenue.

A Parliamentary Budget Office costing of the policy submitted by independent senator David Leyonhjelm shows the cost of the measure - which would effectively cut 10 per cent from every power bill - would blow out to more than $32 billion within a decade.

That would wipe out nearly all the gains from the $35.6 billion in company tax cuts dumped by the Turnbull government on Wednesday.

"Any change to the GST, as you know, to its rate or its base, has to be agreed by all states and territories and I'm sure that they would say - well, if you want to do it, that's fine, send us
$7.5 billion," said Mr Morrison.

"That would be a budget blower, an absolute budget blower."

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Mr Morrison's emphatic support of Mr Turnbull effectively rules out the Treasurer as as potential leadership contender, with the conservative NSW MP throwing his weight behind the Prime Minister and questioning Mr Dutton's understanding of economic policy.

"You can make all sorts of promises about how much money you're going to spend, but at the end of the day, you've got to account for it," he said.

Mr Dutton, who is now openly doing the numbers for another leadership tilt, said on Wednesday that cutting the GST from power bills would give an immediate signal to voters "that we are genuine about getting prices down".

"We need to do whatever we can to reduce those prices and my judgement is the quickest way is to remove the GST because it is an immediate almost 10 per cent downpayment."

He clarified that his proposal would cut the GST from power bills for all families, pensioners and self-funded retirees, but not singles.

An attempt to restrict the benefit could face not only funding difficulties but constitutional challenges.

While welfare can be distributed geographically and demographically, the tax system is based on income rather than socio-economic status.

Mr Turnbull said the cabinet ministers who made up some of the 35 MPs who voted for Mr Dutton in Tuesday's spill had given him unequivocal assurances of continuing loyalty and support.

"What I'm endeavouring to do is to obviously ensure that the party is stable, to maintain the stability of the government of Australia," he said.

Finance Minister Mathias Cormann - a close friend of Mr Dutton’s - stood next to Mr Turnbull and Mr Morrison and gave the Prime Minister his backing.

“I was very grateful when Malcolm invited me to serve in his cabinet in 2015,” he said. “I’ve served Malcolm loyally ever since, and I will continue to serve him loyally into the future.”