The Hawke government introduced Medicare in 1984. Once John Howard replaced Andrew Peacock as Opposition Leader in 1985, Howard repeatedly criticised Medicare as not being fit for purpose.

In his biography John Howard, Prime Minister, the late David Barnett records that Howard promised in December 1986 that, in his new Coalition family policy, ‘Bulk-billing under Medicare would go, except for those classified as disadvantaged, and there would be the option of belonging either to [the revamped] Medicare or to a private health fund.’

After the loss at the 1987 election, in December 1988 Howard produced the policy blueprint, Future Directions.