The Government's backdown over the Medicare rebate is evidence of decision-making that is as chaotic as it is confusing, and does not augur well for a Prime Minister who continues to fumble, writes Norman Abjorensen.

It's been asked whether Medicare will survive the Abbott Government, but it might now be more pertinent to ask whether Tony Abbott will survive Medicare.

The extraordinary volte-face of the Government over the short consultation fee suggests that either the PM changed his mind on a key policy at the last minute, or this has been one of the most humiliating rebuffs to a prime minister in recent years, with the new Health Minister, Sussan Ley, being sent out to announce the retreat just a day after it was talked up by Mr Abbott.

What the Government's backdown means is that Australians will not pay more from Monday if they have a short consultation with their doctor. A mere 24 hours earlier, the Prime Minister was robustly defending the proposal to cut $20.10 from the rebate paid to GPs for consultations of less than 10 minutes.

Whatever gloss is put on the decision, the unavoidable picture that emerges to an outside observer is that that either the Prime Minister has been rolled, comprehensively, totally and most embarrassingly, or chose to back down at the last minute. If the latter, it would be interesting to know how he was persuaded.

Dissension in government is by no means uncommon, and prime ministers will from time to time publicly countermand ministers. It is far less common, however, for a minister to be out there publicly reversing a prime ministerial pronouncement.

Dissension properly managed will not turn into revolt, but unmanaged dissension can quickly morph into something more damaging - a power struggle. Australian political history is littered with prime ministers who fell after failing to manage dissent - Hughes, Menzies, Gorton, Hawke and, more recently, Rudd and Gillard.

This was inept whichever way you look at it. Not only were there howls of outrage from the medical profession and other groups, not to mention the embattled LNP Government in Queensland in the throes of a tight election campaign, but even from within Government ranks there was head shaking aplenty. This is not just policy on the run, it is policy at a frenetic gallop. It was an assault on what wise Ben Chifley liked to call "the hip pocket nerve". Did the Government not realise this? It is inconceivable that the Government was taken by surprise. Whatever the merits of the policy, it was bad politics, politics at its worst.

For starters, did anyone think about the timing with the Queensland election campaign under way? It was even more egregious than the former defence minister, David Johnston's gaffe, during the crucial Fisher by-election in South Australia, about the SA-based Australian Submarine Corporation not being capable of building a canoe. The comment came after pre-poll voting had opened but before the poll, and the Liberal vote plummeted in a contest that handed Labor majority government.

On another front, the audacious Medicare proposal was never going to get through the Senate, so why was it proposed in the first place? The rapid lining up of the crossbench Senators with the Labor Opposition suggested there had been little or no negotiation. Labor, the Greens and four crossbenchers had planned to disallow the measure when the Senate returned on February 9.

It appears that nothing has been learnt from the stalled budget - framed to appeal to the big backers of the Coalition, but with little chance of passing the Senate.

Leaving aside the economic arguments for the Medicare change (and social policy is always more than economics), this is evidence of a decision-making process that is as chaotic as it is confusing. Mr Abbott as opposition leader was scathing in his criticism of the heavy-handedness of Kevin Rudd and his micro-management, but this is far worse on every score.

First, it was a policy decision that could not be implemented, and merely exposes the Government to well-earned ridicule; second, it alienated powerful and vocal groups like the AMA without finding compensatory friends; third, it will do nothing to arrest the Government's slide after 14 months of dismal poll results; and finally it raises crucial questions about leadership.

The Government is now approaching the half-way mark of its term, and a nervous group of backbenchers who came in on the anti-Labor swing in 2013 will surely be looking towards 2016 with mounting anxiety. To compound their concerns, the looming election in Queensland on January 31 will see, whatever the outcome, a big loss of LNP-held seats from the landslide election win in 2012, and a similarly large conservative majority in New South Wales is also certain to be trimmed in the state election at the end of March.

And it is not only backbenchers who are looking at events with increasingly furrowed brows. The rapidity of the reversal of the Medicare decision smacks strongly of serious intervention; in effect, the Prime Minister was faced down and a new minister was sent out to save his face.

This scenario does not augur well for the Prime Minister who continues to fumble. His recent secret visit to Iraq, intended to show his support for the Australian forces there, merely offered another opportunity for embarrassment, when he referred to "president" al-Abadi at a joint media conference. Haider al-Abadi is of course prime minister (the president is Fuad Masum). A slip of the tongue, perhaps, but it did serve to undermine Mr Abbott's professed concern for and interest in Iraq. (An equivalent gaffe in Australia would be for a visitor to publicly greet Mr Abbott as the governor-general).

A Liberal MP with a deep interest in foreign affairs said to me at the time with a wry smile: "I wonder what Julie Bishop thinks of this?"

Indeed. And we also might wonder what role the Foreign Minister and Deputy Liberal Leader played in the Medicare revolt. It would not, one might reasonably assume, have been a minor one.

The Liberal party room will no doubt be a lively affair when the troops return from their electorates in a few weeks.

Dr Norman Abjorensen is at the ANU's Crawford School of Public Policy. He is co-author of Australia: The State of Democracy. He is currently writing a book on prime ministerial exits, to be published later this year.