Mal Brough has become the ninth coalition MP to announce his retirement, as the prime minister weighs up tax policy and election timing.
The Queensland MP resigned from the Turnbull ministry in February, having earlier stood aside amid a police investigation into his alleged role in the Peter Slipper-James Ashby affair.
Mr Brough's exit headed off a decision by the Liberal-National Party state executive, which was meeting on Friday.
Last November, Malcolm Turnbull expressed his "confidence" in Mr Brough in parliament but did not include the former Howard government minister in his most recent reshuffle.
The prime minister was asked on Friday whether he had confidence in another member of his team, Treasurer Scott Morrison.
Mr Morrison has been the subject of speculation he has been sidelined as Mr Turnbull's office takes the lead on tax policy ahead of the May budget.
"The treasurer has my complete confidence, as do all of my ministers," the prime minister told reporters in Canberra.
Tax policy "principally" involved Treasury, but also included his own department, as well as finance and social security.
"I am leading a cabinet government - we consider these issues carefully, we work them through, we analyse them carefully."
Mr Turnbull did not rule out releasing policies, including a tax statement, before the May 10 budget.
A number of Liberal backbenchers have called on the prime minister to completely rule out changes to negative gearing and capital gains tax, in order to negate Labor's policy.
Shadow treasurer Chris Bowen said the government's economic policy was in tatters.
"There is a leadership vacuum in this government and the lack of leadership from Malcolm Turnbull and Scott Morrison is being filled by these backbenchers," he told reporters.
Amid speculation of a July double-dissolution election, Mr Turnbull said he expected the election to be held between August and October, but added there were "other options available".
The rushing of Senate voting reform through parliament has ignited speculation of a double-dissolution election under new rules.
It also has minor parties discussing ways in which they can work more closely to defeat Labor, the coalition and the Greens.
Clive Palmer has met with two key crossbench senators, David Leyonhjelm and Bob Day, to discuss cooperation at the election.
Senator Leyonhjelm told AAP that while he appreciated the benefits of closer cooperation on preferences he was not convinced of running under the same banner.
