The government has capitulated and scrapped its plans to next week cut the Medicare rebate by $20 for short visits to the doctor after a fierce backlash by doctors and non-government Senators.
Changes to the rebate are "off the table" Health Minister Sussan Ley said, and she would now consult on the issue. However she remains committed to the separate $5 co-payment policy that would apply to all GP from July.
In an embarrassing backdown for the government, new minister Ms Ley broke her holidays to announce the decision on Thursday after days of campaigning by GPs that had prompted the Senate to vow to overturn the move when Parliament resumed in Feburary.
"The government is taking them off the table," she told reporters in Melbourne.
Just 24 hours earlier, Prime Minister Tony Abbott was strongly defending the measure - quietly announced by the former health minister Peter Dutton late last year - as an "economic reform" that was designed to lead to better patient care by busting the so-called practice of "six minute medicine" where short appointments are scheduled to maximise the number of taxpayer subsidies received.
Ms Ley said she was still committed to introducing price signals and address six minute medicine but vowed to consult better with the sector.
"My message today is to pause, to listen and then to consult," she said.
Australian Medical Association President Brian Owler released a copy of a scathing letter he wrote to Mr Abbott last week in which he asked the government to "urgently make a new regulation" to repeal the cuts, which are due to come into effect on January 19 and sought an "early meeting" with the Prime Minister.
"Your government has imposed this significantly detrimental measure on general practice without consultation, with only five weeks' notice and during a period when they are operating with minimum staff," Mr Owler wrote on January 8.
"You have left it to general practitioners to explain your "savings" measure to the Australian people.
"This is hardly congruent with a government that is 'totally committed to rebuilding general practice' and that is 'cutting red tape'," he said.
Professor Owler said the "level of anger and disbelief" among doctors at what Labor is calling a "sneaky backdoor" attack on Medicare is "unprecedented".
Mr Abbott says the "price signal" is an "economic reform" aimed at busting the so-called practice of "six-minute medicine" where fast appointments are scheduled to maximise the number of taxpayer subsidies received.
He has called on the opposition and the crossbenchers to come up with alternative savings measures to pay off the debt and deficit instead of obstructing the government's attempts to repair the budget.
Federal Labor has sought to place the issue at the heart of the Queensland state election campaign with Opposition Leader Bill Shorten and his Health Spokeswoman Catherine King campaigning on the issue in Brisbane on Thursday.
Mr Shorten, the Greens, Palmer United and crossbenchers Jacqui Lambie, Ricky Muir and Nick Xenophon have vowed to block the measure in the Senate when Parliament resumes in February.
The Opposition Leader called on Mr Abbott to take the regulations "off the table" before Monday's start date.
"The reaction in the community is widespread and unanimous," he told reporters in Annerley.
"GPs, nurses and clinicians, parents and patients all of one voice are saying to the Abbott government, do not add extra charges and taxes to go and see the doctor," he said.
Queensland Premier Campbell Newman said he had told his federal counterparts he did not support the cuts to the Medicare rebate because it could drive patients to state-funded hospital emergency departments.
"We have expressed concerns about this driving people to emergency departments so we don't support it," Mr Newman said.
Mr Abbott's former advisor when he was the Health Minister, Terry Barnes, called for the delay of the introduction of the rebates to give the Coalition more time to explain the changes and negotiate with the crossbenchers.
"I don't think the government should capitulate to an AMA-led scare campaign on what is sound policy" he told Fairfax Media.
"They should defer the start to 1 March to allow for a vote to be taken in the Senate and give the government time to explain that the changes won't be the end of civilization as we know it," he said.