Talk about a hospital pass. With doctors taking to the streets, the former health minister Peter Dutton’s reforms have become a nightmare for his successor, Sussan Ley.

In early December, Tony Abbott replaced the $7 co-payment proposed in the last federal budget with a new “optional” $5 co-payment (starting from July) and a cut of up to $20 to the Medicare rebate paid to doctors for consultations under 10 minutes.

As one doctor tweeted when the new rebate was first reported:

The rebate cuts come into effect on Monday in what the Australian Medical Association is already describing as a “sneaky” tactic over the Christmas break and the opposition is calling a “GP tax by stealth”. Many GPs, especially in rural and regional areas, are struggling financially and simply can’t absorb the pay cut: 87% of doctors surveyed by the AMA say they will be forced to charge patients more for consultations.

This is bad health policy, as our Croakey blog has argued repeatedly, undermining primary health care — the foundation of an effective health system — when it is widely agreed that the balance needs to be shifted away from a hospital-centric system.

The rebate cuts — expected to save half a billion dollars a year — are dwarfed by potential cuts of as much as $15 billion identified by the Health Department, as The Australian reports today. They are hardly even justified by budget repair because the money is being shovelled into the Medical Research Future Fund dubbed by some doctors as an “industry slush fund”.

Fundamentally hostile to bulk-billing, the government is pushing fiscal policy masquerading as health policy that will only result in a massive cost shift to the states, forcing more people into public hospital emergency wards. It’s hard to see how this won’t backfire on the Abbott government.