In a stunning display of what political scientists call "listening after getting absolutely hammered in the polls," Labor has backflipped on its plan to impose a $5,000 cap on health services for defence veterans. The government announced it would no longer pursue the cap for allied health services, which had been scheduled to kick in on 1 July 2027, following weeks of sustained criticism from the opposition, veterans groups, and independent senator Jacqui Lambie.

Veterans' affairs minister Matt Keogh made the surprise announcement on Thursday, saying he would drop the plan after concerns were raised following the May federal budget. "We have been consulting on this measure, and we have heard from veterans there are concerns about this approach," Keogh said in a statement, presumably while staring directly at the political woodchipper he'd just avoided. "We have been listening carefully and today, the government is taking the proposed $5,000 threshold off the table."

Keogh had been strongly criticised by veterans and the Coalition after he initially refused to meet with a group of former servicemen lobbying to scrap the changes - a decision that went about as well as you'd expect. Opposition leader Angus Taylor has called on Prime Minister Anthony Albanese to sack Keogh, because nothing says "support our troops" like a spot of ministerial defenestration.

The original policy was designed to stop veterans from having to go back to a doctor for an allied health referral every 12 sessions. The government had said veterans needing more funding over the cap would still be allowed to apply for extra assistance - a detail that apparently did little to soothe anyone who noticed that "apply for extra assistance" sounds an awful lot like "jump through more hoops while injured."

Lambie, who revealed her own health struggles and access to care in an impassioned Senate speech last month, urged the government to drop the cap, warning it would have "devastating impacts" on veterans. "This cap was cruel, it was dangerous and it should never have been announced in the first place," Lambie said in a statement on Thursday. "I'm relieved that the government has finally listened and scrapped it and I thank them for doing it."

She added: "This win belongs to every veteran, family member and Australian who spoke out, lobbied the government, signed the petition and kept the pressure on. They knew what would happen to our most vulnerable veterans if this cap went ahead and they fought like hell to make sure it didn't."

Taylor, never one to miss a political pile-on, accused Keogh of not being up to the job and called the cap "egregious." "This was a mistake from the start. It should never have happened," he said. "These are people who are prepared to put themselves in harm's way for our country, serving our country. This is a government that has had its priorities wrong from the moment we saw the budget. The budget is unwinding before our eyes."

Fair Care for Veterans spokesman John Armfield, a former Navy clearance diver, thanked Keogh for the backdown. "This is what happens when a government listens to veterans," he said. "Veterans, families and doctors came from all over the country to say one thing: this cap would only ever hurt the most badly injured. Today the minister agreed, and we thank him for it. Nobody had to lose for this to happen. The minister made the right call, and he deserves credit for it."

So there you have it: a policy that everyone hated, announced, defended, and then quietly euthanised. Democracy - messy, loud, and occasionally functional.